Exhibit 10.1
EXECUTION COPY
$600,000,000
CREDIT AGREEMENT
dated as of
May 27, 2005
among
The ▇▇▇▇▇ ▇▇▇▇▇▇ Companies Inc.,
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
The Eligible Subsidiaries Referred to Herein,
The Lenders Listed Herein,
JPMorgan Chase Bank, N.A.,
as Administrative Agent,
Citibank, N.A. and Bank of America, N.A.,
as Syndication Agents,
and
Bank of Tokyo-Mitsubishi Trust Company and BNP Paribas,
as Documentation Agents
-----------------------------
Sole Bookrunner and Sole Lead Arranger:
▇.▇. ▇▇▇▇▇▇ Securities Inc.
TABLE OF CONTENTS
-------------------------------
PAGE
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions......................................................................................1
Section 1.02. Accounting Terms and Determinations.............................................................19
Section 1.03. Types of Borrowing..............................................................................19
ARTICLE 2
THE CREDITS
Section 2.01. Commitments To Lend.............................................................................20
Section 2.02. Notice of Committed Borrowing...................................................................20
Section 2.03. Competitive Bid Borrowings......................................................................21
Section 2.04. Notice To Lenders; Funding of Loans.............................................................25
Section 2.05. Evidence Of Debt................................................................................26
Section 2.06. Maturity of Loans...............................................................................27
Section 2.07. Interest Rates..................................................................................27
Section 2.08. Fees............................................................................................29
Section 2.09. Optional Termination or Reduction of Commitments................................................30
Section 2.10. Method of Electing Interest Rates...............................................................30
Section 2.11. Mandatory Termination of Commitments............................................................32
Section 2.12. Optional Prepayments............................................................................32
Section 2.13. Determining Dollar Amounts of Committed Alternative Currency Loans; Related Mandatory
Prepayments....................................................................................33
Section 2.14. General Provisions as to Payments...............................................................34
Section 2.15. Funding Losses..................................................................................35
Section 2.16. Computation of Interest and Fees................................................................36
Section 2.17. [Intentionally Omitted].........................................................................36
Section 2.18. Regulation D Compensation.......................................................................36
Section 2.19. Letters of Credit...............................................................................37
Section 2.20. Incremental Increase in Commitments.............................................................41
ARTICLE 3
CONDITIONS
Section 3.01. Closing.........................................................................................42
Section 3.02. Borrowings and Issuances of Letters of Credit...................................................43
Section 3.03. First Borrowing by Each Eligible Subsidiary.....................................................44
Section 3.04. Prior Credit Agreement..........................................................................44
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.01. Corporate Existence and Power...................................................................45
Section 4.02. Corporate and Governmental Authorization; No Contravention......................................45
Section 4.03. Binding Effect..................................................................................45
Section 4.04. Financial Information...........................................................................45
Section 4.05. Litigation......................................................................................46
Section 4.06. Compliance with ERISA...........................................................................46
Section 4.07. Environmental Matters...........................................................................46
Section 4.08. Taxes...........................................................................................47
Section 4.09. Subsidiaries....................................................................................47
Section 4.10. Regulatory Restrictions on Borrowing............................................................47
Section 4.11. Full Disclosure.................................................................................47
ARTICLE 5
COVENANTS
Section 5.01. Information.....................................................................................48
Section 5.02. Payment of Obligations..........................................................................50
Section 5.03. Insurance.......................................................................................50
Section 5.04. Conduct of Business and Maintenance of Existence................................................50
Section 5.05. Compliance with Laws............................................................................51
Section 5.06. Inspection of Property, Books and Records.......................................................51
Section 5.07. Mergers and Sales of Assets.....................................................................51
Section 5.08. Use of Proceeds.................................................................................51
Section 5.09. Negative Pledge.................................................................................51
Section 5.10. Debt to Total Capital...........................................................................53
Section 5.11. Debt of Subsidiaries............................................................................53
Section 5.12. Transactions with Affiliates....................................................................53
ARTICLE 6
DEFAULTS
Section 6.01. Events of Default...............................................................................54
Section 6.02. Notice of Default...............................................................................56
ARTICLE 7
THE ADMINISTRATIVE AGENT
Section 7.01. Appointment and Authorizations..................................................................56
Section 7.02. Agents and Affiliates...........................................................................56
Section 7.03. Action by Agents................................................................................56
Section 7.04. Consultation with Experts.......................................................................56
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Section 7.05. Liability of Agents.............................................................................57
Section 7.06. Indemnification.................................................................................57
Section 7.07. Credit Decision.................................................................................57
Section 7.08. Successor Agents................................................................................57
Section 7.09. Administrative Agent's Fees.....................................................................58
Section 7.10. Other Agents Not Liable.........................................................................58
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair........................................58
Section 8.02. Illegality......................................................................................59
Section 8.03. Increased Cost and Reduced Return...............................................................60
Section 8.04. Taxes...........................................................................................61
Section 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans.......................................63
Section 8.06. Substitution of Lenders.........................................................................63
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF ELIGIBLE SUBSIDIARIES
Section 9.01. Corporate Existence and Power...................................................................64
Section 9.02. Corporate Governmental Authorization; No Contravention..........................................64
Section 9.03. Binding Effect..................................................................................64
Section 9.04. Taxes...........................................................................................64
ARTICLE 10
MISCELLANEOUS
Section 10.01. Notices........................................................................................65
Section 10.02. No Waivers.....................................................................................65
Section 10.03. Expenses; Indemnification......................................................................65
Section 10.04. Sharing of Set-Offs............................................................................67
Section 10.05. Amendments and Waivers.........................................................................67
Section 10.06. Successors and Assigns.........................................................................68
Section 10.07. Collateral.....................................................................................70
Section 10.08. Governing Law, Submission to Jurisdiction .....................................................70
Section 10.09. Counterparts; Integration; Effectiveness.......................................................71
Section 10.10. WAIVER OF JURY TRIAL...........................................................................71
Section 10.11. Confidentiality................................................................................71
Section 10.12. Conversion of Currencies.......................................................................72
Section 10.13. European Economic and Monetary Union...........................................................72
Section 10.14. USA Patriot Act................................................................................73
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ARTICLE 11
GUARANTY
Section 11.01. The Guaranty...................................................................................73
Section 11.02. Guaranty Unconditional.........................................................................74
Section 11.03. Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances....................75
Section 11.04. Waiver by the Guarantor........................................................................75
Section 11.05. Subrogation....................................................................................75
Section 11.06. Stay of Acceleration...........................................................................75
Section 11.07. Limitation of Liability........................................................................75
Section 11.08. Notice of Commitment Termination...............................................................76
Commitment Schedule
Pricing Schedule
Schedule 4.05 - Litigation
EXHIBIT A - Note
EXHIBIT B - Competitive Bid Quote Request
EXHIBIT C - Invitation for Competitive Bid Quotes
EXHIBIT D - Competitive Bid Quote
EXHIBIT E - Opinion of Counsel for the Obligors
EXHIBIT F - Opinion of Special Counsel for the Administrative Agent
EXHIBIT G - Assignment and Assumption Agreement
EXHIBIT H - Calculation of Mandatory Costs Rate
EXHIBIT I - Election to Participate
EXHIBIT J - Election to Terminate
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AGREEMENT dated as of May 27, 2005 among THE ▇▇▇▇▇ ▇▇▇▇▇▇ COMPANIES
INC., ▇▇▇▇▇ ▇▇▇▇▇▇ INC., the ELIGIBLE SUBSIDIARIES referred to herein, the
LENDERS listed on the signature pages hereof, JPMORGAN CHASE BANK, N.A., as
Administrative Agent, CITIBANK N.A. and BANK OF AMERICA, N.A., as Syndication
Agents, and BANK OF TOKYO-MITSUBISHI TRUST COMPANY and BNP PARIBAS, as
Documentation Agents.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"ABSOLUTE RATE AUCTION" means a solicitation of Competitive Bid
Quotes setting forth Competitive Bid Absolute Rates pursuant to Section 2.03.
"ADMINISTRATIVE AGENT" means JPMorgan Chase Bank, N.A. in its
capacity as Administrative Agent for the Lenders hereunder, and its successors
in such capacity.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Company) duly
completed by such Lender.
"AFFILIATE" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Company (a "CONTROLLING PERSON") or
(ii) any Person (other than the Company or a Subsidiary) which is controlled by
or is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to vote
securities constituting 10% or more of the voting power represented by all of
the outstanding voting securities of a Person or to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"AFFILIATE TRANSACTION" has the meaning set forth in Section 5.12.
"ALTERNATIVE CURRENCIES" means Sterling, Euros, Yen and Swiss Francs.
"ALTERNATIVE CURRENCY SUBLIMIT" means a Dollar Amount equal to
$250,000,000.
"APPLICABLE AGENT" means, (a) with respect to a Loan or Borrowing
denominated in Dollars, the Administrative Agent, or (b) with respect to any
particular Alternative Currency, the Administrative Agent or such other Person
as may be agreed upon by the Company and the Administrative Agent and designated
in a notice delivered to the Lenders.
"APPLICABLE LENDING OFFICE" means, with respect to any Lender, (i) in
the case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case
of its Euro-Currency Loans, its Euro-Currency Lending Office and (iii) in the
case of its Competitive Bid Loans, its Competitive Bid Lending Office.
"APPROVED FUND" means any Fund that is administered or managed by (i)
a Lender, (ii) an affiliate of a Lender or (iii) an entity or an affiliate of an
entity that administers or manages a Lender.
"ARRANGER" means ▇.▇. ▇▇▇▇▇▇ Securities Inc.
"ASSIGNEE" has the meaning set forth in Section 10.06(c).
"AVAILABLE COMMITMENT" means, with respect to any Lender at any time,
an amount equal to such Lender's Commitment at such time minus such Lender's
Outstanding Committed Amount at such time.
"BASE RATE" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"BASE RATE LOAN" means (i) a Committed Dollar Loan which bears
interest at the Base Rate pursuant to the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election, (ii) a Committed Loan which bears
interest at the Base Rate pursuant to the provisions of Article 8 or (iii) an
overdue amount which was a Base Rate Loan immediately before it became overdue.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"BORROWER" means the Company or any Eligible Subsidiary, as the
context may require, and their respective successors, and "BORROWERS" means all
of the foregoing. When used in relation to any Loan or Letter of Credit,
references to "THE BORROWER" are to the particular Borrower to which such Loan
is or is to be made or at whose request such Letter of Credit is or is to be
issued.
"BORROWING" has the meaning set forth in Section 1.03.
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"CHANGE OF CONTROL" means (i) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than
the Lauder Family Members, of equity interests representing more than 30% of the
aggregate ordinary voting power represented by the issued and outstanding equity
interests of the Company; (ii) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Company by persons who were
neither (x) nominated by the board of directors of the Company nor (y) appointed
by directors so nominated; (iii) the acquisition of direct or indirect control
of the Company by any person or group other than the Lauder Family Members; or
(iv) the Company shall cease at any time to own, directly or indirectly, 100% of
the outstanding capital stock of the Company Guarantor.
"CLOSING DATE" means May 27, 2005 or such later date on which the
Administrative Agent shall have received the documents specified in or pursuant
to Section 3.01.
"COMMITMENT" means (i) with respect to each Lender, the amount of
such Lender's Commitment, as such amount is set forth opposite the name of such
Lender on the Commitment Schedule, as such Commitment may be (a) increased from
time to time pursuant to Section 2.20, (ii) with respect to any Additional
Lender, the amount of the Commitment assumed by it pursuant to Section 2.20, and
(iii) with respect to any Assignee, the amount of the transferor Lender's
Commitment assigned to it pursuant to Section 10.06, in each case as such amount
may be reduced from time to time pursuant to Section 2.09 and Section 2.20 or
Section 10.06; provided that, if the context so requires, the term "Commitment"
means the obligation of a Lender to extend credit up to such amount to the
Borrowers hereunder.
"COMMITTED ALTERNATIVE CURRENCY LOANS" means Loans denominated in
Alternative Currencies and made pursuant to Section 2.01.
"COMMITTED DOLLAR LOANS" means Loans denominated in dollars and made
pursuant to Section 2.01.
"COMMITTED LOAN" means a Committed Dollar Loan or a Committed
Alternative Currency Loan; provided that, if any such loan or loans (or portions
thereof) are combined or subdivided pursuant to a Notice of Interest Rate
Election, the term "Committed Loan" shall refer to the combined principal Dollar
Amount resulting from such combination or to each of the separate principal
Dollar Amounts resulting from such subdivision, as the case may be.
"COMPANY" means The ▇▇▇▇▇ ▇▇▇▇▇▇ Companies Inc., a Delaware
corporation, and its successors.
3
"COMPANY GUARANTOR" means ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., a Delaware corporation,
and its successors.
"COMPETITIVE BID ABSOLUTE RATE" has the meaning set forth in Section
2.03(d).
"COMPETITIVE BID ABSOLUTE RATE LOAN" means a loan to be made by a
Lender pursuant to an Absolute Rate Auction.
"COMPETITIVE BID LENDING OFFICE" means, as to each Lender, its
Domestic Lending Office or such other office, branch or affiliate of such Lender
as it may hereafter designate as its Competitive Bid Lending Office by notice to
the Company and the Administrative Agent; provided that any Lender may from time
to time by notice to the Company and the Administrative Agent designate separate
Competitive Bid Lending Offices for its Competitive Bid LIBOR Loans, on the one
hand, and its Competitive Bid Absolute Rate Loans, on the other hand, in which
case all references herein to the Competitive Bid Lending Office of such Lender
will be deemed to refer to either or both of such offices, as the context may
require.
"COMPETITIVE BID LIBOR LOAN" means a loan to be made by a Lender
pursuant to a LIBOR Auction (including such a loan bearing interest at the Base
Rate pursuant to Section 8.01).
"COMPETITIVE BID LOAN" means a Competitive Bid LIBOR Loan or a
Competitive Bid Absolute Rate Loan.
"COMPETITIVE BID MARGIN" has the meaning set forth in Section
2.03(d)(ii)(C).
"COMPETITIVE BID QUOTE" means an offer by a Lender to make a
Competitive Bid Loan in accordance with Section 2.03.
"CONSOLIDATED DEBT" means at any date the average of the Debt of the
Company and its Consolidated Subsidiaries, determined on a consolidated basis,
at the last day of each of the four consecutive fiscal quarters of the Company
ended on or most recently prior to such date.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Company in
its consolidated financial statements if such statements were prepared as of
such date.
"CONSOLIDATED TANGIBLE NET WORTH" means at any date the consolidated
stockholders' equity of the Company and its Consolidated Subsidiaries (excluding
for this purpose any amount attributable to stock which is required to be
4
redeemed, or is redeemable at the option of the holder, if certain events or
conditions occur or exist or otherwise, other than shares of the Company's
Series A cumulative redeemable preferred stock, par value $.01 per share, due
June 2015 outstanding on the date of this Agreement) less their consolidated
Intangible Assets, all determined as of such date. For purposes of this
definition, "Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) of (i) all write-ups (other
than write-ups resulting from foreign currency translations and write-ups of
assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to June 30, 2004 in the book value of
any asset owned by the Company or a Consolidated Subsidiary, (ii) all
investments in unconsolidated Subsidiaries and all equity investments in Persons
which are not Subsidiaries and (iii) all unamortized debt discount and expense,
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, anticipated future benefit of tax loss carry-forwards, copyrights,
organization or developmental expenses and other intangible assets.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all non-contingent
obligations (and, for purposes of Section 5.10 and the definitions of Material
Debt and Material Financial Obligations, all contingent obligations) of such
Person to reimburse any bank or other Person in respect of amounts paid under a
letter of credit or similar instrument, (vi) all Debt secured by a Lien on any
asset of such Person, whether or not such Debt is otherwise an obligation of
such Person and (vii) all Debt of others Guaranteed by such Person.
"DEBT TO CAPITAL RATIO" means at any date the ratio of (i)
Consolidated Debt to (ii) Total Capital, in each case determined at such date.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
5
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"DOLLAR AMOUNT" means, at any time:
(i) with respect to any Loan denominated in dollars, the
principal amount thereof then outstanding;
(ii) with respect to any Committed Alternative Currency
Loan, the equivalent in dollars of the principal amount thereof then
outstanding in the relevant Alternative Currency, determined by the
Administrative Agent using the Exchange Rate with respect to such
Alternative Currency then in effect; and
(iii) with respect to any Letter of Credit Liabilities, (A)
if denominated in Dollars, the amount thereof and (B) if denominated
in an Alternative Currency, determined by the Administrative Agent
using the Exchange Rate with respect to such Alternative Currency
then in effect.
"DOLLARS", "DOLLARS" and the sign "$" mean lawful currency of the
United States.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"DOMESTIC LENDING OFFICE" means, as to each Lender, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Lender may hereafter designate as its Domestic
Lending Office by notice to the Company and the Administrative Agent.
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 10.09.
"ELECTION TO PARTICIPATE" means an Election to Participate
substantially in the form of Exhibit I hereto.
"ELECTION TO TERMINATE" means an Election to Terminate substantially
in the form of Exhibit J hereto.
"ELIGIBLE SUBSIDIARY" means any Wholly-Owned Consolidated Subsidiary
as to which an Election to Participate shall have been delivered to the
Administrative Agent and as to which an Election to Terminate with respect to
such Election to Participate shall not have been delivered to the Administrative
Agent. Each such Election to Participate and Election to Terminate shall be duly
6
executed on behalf of such Wholly-Owned Consolidated Subsidiary and the Company
in such number of copies as the Administrative Agent may request. If at any time
a Subsidiary theretofore designated as an Eligible Subsidiary no longer
qualifies as a Wholly-Owned Consolidated Subsidiary, the Company shall cause to
be delivered to the Administrative Agent an Election to Terminate terminating
the status of such Subsidiary as an Eligible Subsidiary. The delivery of an
Election to Terminate shall not affect any obligation of an Eligible Subsidiary
theretofore incurred or the guaranty thereof by the Company and the Company
Guarantor. The Administrative Agent shall promptly give notice to the Lenders of
the receipt of any Election to Participate or Election to Terminate.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Company, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Company or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"EURO" means the single currency of the Participating Member States
of the European Union.
"EURO-CURRENCY BUSINESS DAY" means a Euro-Dollar Business Day, unless
such term is used in connection with an Alternative Currency Borrowing or
Committed Alternative Currency Loan, in which case such day shall not be a
Euro-Currency Business Day unless commercial banks are open for international
business (including dealings in deposits in such Alternative Currency) in both
London and the place designated by the Applicable Agent with respect to such
Alternative Currency for funds to be paid or made available in such Alternative
Currency.
"EURO-CURRENCY LENDING OFFICE" means, as to each Lender, its office,
branch or affiliate located at its address set forth in its Administrative
7
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Currency Lending Office) or such other office, branch or affiliate of such
Lender as it may hereafter designate as its Euro-Currency Lending Office by
notice to the Company and the Administrative Agent; provided that any Lender may
from time to time by notice to the Company and the Administrative Agent
designate separate Euro-Currency Lending Offices for its Loans in different
currencies, in which case all references herein to the Euro-Currency Lending
Office of such Lender shall be deemed to refer to any or all of such offices, as
the context may require.
"EURO-CURRENCY LOAN" means a Committed Loan that is either a
Euro-Dollar Loan or a Committed Alternative Currency Loan.
"EURO-CURRENCY MARGIN" has the meaning set forth in the Pricing
Schedule.
"EURO-CURRENCY RATE" means a rate of interest determined pursuant to
Section 2.07 on the basis of a London Interbank Offered Rate.
"EURO-CURRENCY RESERVE PERCENTAGE" means, for any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Lender to the United States residents).
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"EURO-DOLLAR LOAN" means (i) a Committed Dollar Loan which bears
interest at a Euro-Currency Rate pursuant to the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which
was a Euro-Dollar Loan immediately before it became overdue.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCHANGE RATE" means, on any day, with respect to any Alternative
Currency, the rate at which such Alternative Currency may be exchanged into
dollars (and, for purposes of any provision of this Agreement requiring or
permitting the conversion of Committed Alternative Currency Loans to Loans
8
denominated in dollars, the rate at which dollars may be exchanged into the
applicable Alternative Currency), as set forth at or about 9:00 a.m., New York
City time, or at or about 11:00 a.m., London time, on such date on the Reuters
World Currency Page for such currency. In the event that such rate does not
appear on any Reuters World Currency Page, the Exchange Rate shall be determined
by reference to such other publicly available service for displaying exchange
rates as may be agreed upon by the Administrative Agent, the Applicable Agent
with respect to such Alternative Currency and the Company, or, in the absence of
such agreement, such Exchange Rate shall instead be the arithmetic average of
the spot buying and selling rates of exchange of such Applicable Agent in the
market where its foreign currency exchange operations in respect of such
currency are then being conducted, on or about 11:00 a.m., New York City time,
or on or about 11:00 a.m., London time, on such date for the purchase of dollars
(or such foreign currency, as the case may be) for delivery two Business Days
later; provided that if at the time of any such determination, for any reason,
no such spot rate is being quoted, such Applicable Agent, after consultation
with the Company and the Administrative Agent, may use any reasonable method it
deems appropriate to determine such rate, and such determination shall be
presumed correct absent manifest error.
"EXISTING CREDIT AGREEMENT" means the Credit Agreement dated as of
June 28, 2001 among the Company, the Company Guarantor, the lenders listed
therein and the administrative agent listed therein.
"FACILITY FEE" has the meaning set forth in Section 2.08.
"FACILITY FEE RATE" has the meaning set forth in the Pricing
Schedule.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to JPMorgan Chase Bank, N.A. on such day on
such transactions as determined by the Administrative Agent.
"FIXED RATE LOANS" means Euro-Currency Loans or Competitive Bid Loans
(excluding Competitive Bid LIBOR Loans bearing interest at the Base Rate
pursuant to Section 8.01) or any combination of the foregoing.
9
"FUND" means any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
"GRANTING LENDER" has the meaning specified in Section 10.06(f).
"GROUP OF LOANS" means at any time a group of Loans consisting of (i)
all Committed Loans to the same Borrower which are Base Rate Loans at such time
or (ii) all Euro-Currency Loans to the same Borrower which are in the same
currency and have the same Interest Period at such time; provided that, if a
Committed Loan of any particular Lender is converted to or made as a Base Rate
Loan pursuant to Article 8, such Loan shall be included in the same Group or
Groups of Loans from time to time as it would have been if it had not been so
converted or made.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the holder of such Debt of the
payment thereof or to protect such holder against loss in respect thereof (in
whole or in part); provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "GUARANTEE" used as a verb has a corresponding meaning.
"GUARANTOR" means, with respect to the obligations of the Borrowers
hereunder, the Company Guarantor and, with respect to the obligations of
Borrowers hereunder other than the Company, the Company, and "Guarantors" means
all of the foregoing.
"GUARANTY" means the obligations of the Guarantors set forth in
Article 11.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"INCREASED COST" has the meaning set forth in Section 10.06(f).
"INCREMENTAL COMMITMENTS" has the meaning set forth in Section 2.20.
10
"INCREMENTAL COMMITMENT NOTICE" has the meaning set forth in Section
2.20.
"INDEMNITEE" has the meaning set forth in Section 10.03(b).
"INTEREST PERIOD" means:
(1) with respect to each Euro-Currency Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as a Borrower may
elect in the applicable notice; provided that:
(a) any Interest Period (except an Interest Period
determined pursuant to clause (c) below) which would otherwise end on
a day which is not a Euro-Currency Business Day shall be extended to
the next succeeding Euro-Currency Business Day unless such
Euro-Currency Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding
Euro-Currency Business Day;
(b) any Interest Period which begins on the last
Euro-Currency Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (c) below,
end on the last Euro-Currency Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date (or, if the
Termination Date is not a Euro-Currency Business Day, on the next
preceding Euro-Currency Business Day);
(2) with respect to each Competitive Bid LIBOR Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such whole number of months thereafter as a Borrower may
elect in accordance with Section 2.03; provided that:
(a) any Interest Period (except an Interest Period
determined pursuant to clause (c) below) which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at
11
the end of such Interest Period) shall, subject to clause (c) below,
end on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date (or, if the
Termination Date is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day); and
(3) with respect to each Competitive Bid Absolute Rate Loan, the
period commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such number of days thereafter (but not less than 7 days)
as a Borrower may elect in accordance with Section 2.03; provided that:
(a) any Interest Period (except an Interest Period
determined pursuant to clause (b) below) which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date (or, if the
Termination Date is not a Euro-Dollar Business Day, on the next
preceding Euro-Dollar Business Day).
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"ISSUING LENDER" means JPMorgan Chase Bank, N.A., in its capacity as
issuer of a Letter of Credit hereunder.
"LAUDER FAMILY MEMBER" means (i) the estate of Mrs. ▇▇▇▇▇ ▇▇▇▇▇▇,
(ii) each descendant of Mrs. ▇▇▇▇▇ ▇▇▇▇▇▇ (each such Person, a "LAUDER
DESCENDANT") and their respective estates, guardians, conservators or
committees, (iii) each Family Controlled Entity, (iv) each Current Spouse of
Lauder Descendants and (v) the trustees, in their respective capacities as such,
of each Family Controlled Trust. As used herein, "FAMILY CONTROLLED ENTITY"
means (w) any not-for-profit corporation if at least a majority of its board of
directors is composed of Lauder Descendants and/or Current Spouses of Lauder
Descendants, (x) any other corporation if (i) both (aa) Lauder Descendants
and/or Current Spouses of Lauder Descendants (or in the case of subclause
(i)(aa)(xx), their respective estates, guardians, conservators or committees)
(xx) hold in the aggregate, directly or indirectly through one or more wholly
owned Persons, securities having ordinary voting power to elect a majority of
the board of directors of such corporation or (yy) constitute a majority of the
board of directors of such corporation and (bb) at least a majority of the value
12
of the outstanding equity of such corporation is owned by Lauder Family Members
or (ii) at least 80% of the value of the outstanding equity of such corporation
is owned by Lauder Family Members, (y) any partnership if at least a majority of
the value of its partnership interests (both general and limited) are owned by
Lauder Family Members, and (z) any limited liability or similar company if (i)
both (aa) Lauder Descendants and/or Current Spouses of Lauder Descendants (or,
in the case of subclause (i)(aa)(xx), their respective estates, guardians,
conservators or committees) (xx) hold in the aggregate, directly or indirectly
through one or more wholly owned Persons, securities or other equity interests
having ordinary voting power to elect or appoint at least a majority of the
managing members of such company or (yy) constitute a majority of the managing
members of such company and (bb) a majority of the value of such company is
owned by Lauder Family Members or (ii) at least 80% of the value of such company
is owned by Lauder Family Members. As used herein, "FAMILY CONTROLLED TRUST"
shall mean any trust the primary beneficiaries of which are Lauder Descendants,
Spouses of Lauder Descendants and/or charitable organizations (collectively,
"LAUDER BENEFICIARIES"); provided, that, if the trust is a wholly charitable
trust, at least a majority of the trustees of such trust consist of Lauder
Descendants and/or Current Spouses of Lauder Descendants. For purposes of the
definition of "Family Controlled Trust", the primary beneficiaries of a trust
will be deemed to be Lauder Beneficiaries if, under the maximum exercise of
discretion by the trustee in favor of persons who are neither Lauder
Beneficiaries nor Family Controlled Trusts, the value of the interests of such
persons in such trust, computed actuarially, is less than 50%. In determining
the primary beneficiaries of a trust for purposes of the definition of "Family
Controlled Trust", (A) the factors and methods prescribed in section 7520 of the
Internal Revenue Code of 1986, as amended, for use in ascertaining the value of
certain interests shall be used in determining a beneficiary's actuarial
interest in a trust, (B) the actuarial value of the interest in a trust of any
person in whose favor a testamentary power of appointment may be exercised shall
be deemed to be zero and (C) in the case of a trust created by one or more of
Mrs. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or Lauder Descendants, the actuarial value
of the interest in such trust of any person who may receive trust property only
at the termination of the trust and then only in the event that, at the
termination of the trust, there are no living issue of one or more of Mrs. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or Lauder Descendants shall be deemed to be zero. For
purposes hereof, (1) "SPOUSES OF LAUDER DESCENDANTS" means those individuals who
at any time were married to any Lauder Descendant whether or not such marriage
is subsequently dissolved by death, divorce, or by any other means, (2) "CURRENT
SPOUSE OF LAUDER DESCENDANTS" means an individual who is married to a Lauder
Descendant, but only so long as such marriage has not been dissolved by death,
divorce or by any other means, (3) the relationship of any person that is
derived by or through legal adoption shall be considered a natural relationship,
(4) a minor who is a descendant of Mrs. ▇▇▇▇▇ ▇▇▇▇▇▇ and for whom equity
interests are held pursuant to a Uniform Gifts to Minors Act or similar law
13
shall be considered the holder of such equity interests and the custodian who is
the record holder of such equity interests shall not be considered the holder
thereof, (5) an incompetent stockholder of any equity interests whose equity
interests are owned or held by a guardian or conservator shall be considered the
holder of such equity interest and such guardian or conservator who is the
holder of such equity interests shall not be considered the holder thereof, (6)
any equity interests pledged by a holder thereof as security for any obligation
shall be deemed to be held by such holder unless and until the pledgee of such
equity interests has declared a default with respect to such obligation and has
the right (whether or not being presently exercised) to vote or direct the
voting of such equity interests and (7) except as provided in clauses (4), (5)
and (6) above, the holder of any equity interests shall mean the record holder
of such equity interests; provided, however, that if such record holder of such
equity interests is a nominee, the holder of such equity interests shall be the
first person in the chain of ownership of such equity interests who is not
holder thereof solely as a nominee.
"LENDER" means (i) each bank or other institution listed on the
signature pages hereof, (ii) each financial institution which becomes a Lender
pursuant to Section 2.20, (iii) each Assignee which becomes a Lender pursuant to
Section 10.06(c) and (iv) their respective successors.
"LETTER OF CREDIT" means a letter of credit to be issued hereunder by
the Issuing Lender in accordance with Section 2.19.
"LETTER OF CREDIT DISBURSEMENT" means a payment made by the Issuing
Lender pursuant to a Letter of Credit.
"LETTER OF CREDIT FEE RATE" has the meaning set forth in the Pricing
Schedule.
"LETTER OF CREDIT LIABILITIES" means, for any Lender and at any time,
such Lender's ratable participation in the sum of (x) the amounts then owing by
each Borrower in respect of amounts drawn under Letters of Credit and (y) the
aggregate amount then available for drawing under all Letters of Credit.
"LETTER OF CREDIT SUBLIMIT" means a Dollar Amount equal to
$100,000,000.
"LIBOR AUCTION" means a solicitation of Competitive Bid Quotes
setting forth Competitive Bid Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
14
interest, in respect of such asset. For the purposes of this Agreement, the
Company or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"LOAN" means a Base Rate Loan, a Euro-Currency Loan or a Competitive
Bid Loan and "LOANS" means Base Rate Loans, Euro-Currency Loans or Competitive
Bid Loans or any combination of the foregoing.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.07(b).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, financial position or results of operations of the Company and its
Consolidated Subsidiaries, taken as a whole.
"MATERIAL DEBT" means Debt (other than the Loans) of the Company
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal or face amount exceeding
$50,000,000.
"MATERIAL FINANCIAL OBLIGATIONS" means a principal or face amount of
Debt and/or payment or collateralization obligations in respect of Derivatives
Obligations of the Company and/or one or more of its Subsidiaries, arising in
one or more related or unrelated transactions, exceeding in the aggregate
$50,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $50,000,000.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"NOTES" means promissory notes of a Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of such Borrower to repay
the Loans made to it, and "NOTE" means any one of such promissory notes issued
hereunder.
"NOTICE OF BORROWING" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Competitive Bid Borrowing (as defined in
Section 2.03(f)).
15
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in
Section 2.10.
"NOTICE OF ISSUANCE" has the meaning set forth in Section 2.19.
"OBLIGORS" means the Borrowers and the Guarantors, and "OBLIGOR"
means any one of the Borrowers and the Guarantors.
"OUTSTANDING COMMITTED AMOUNT" means, as to any Lender at any time,
the sum at such time, without duplication, of (i) the aggregate principal amount
of the outstanding Committed Dollar Loans of such Lender at such time, (ii) the
aggregate Dollar Amount of the aggregate principal amount of the outstanding
Committed Alternative Currency Loans of such Lender at such time and (iii) the
aggregate Dollar Amount of such Lender's Letter of Credit Liabilities at such
time.
"PARENT" means, with respect to any Lender, any Person controlling
such Lender.
"PARTICIPANT" has the meaning set forth in Section 10.06(b).
"PARTICIPATING MEMBER STATE" means those members of the European
Union from time to time which shall have adopted a single, shared currency.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERSON" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"PRICING SCHEDULE" means the Pricing Schedule attached hereto.
"PRIME RATE" means the rate of interest publicly announced by
JPMorgan Chase Bank, N.A. at its Principal Office from time to time as its prime
rate. Each change in the Prime Rate shall be effective from and including the
date such change is publicly announced as being effective.
16
"PRINCIPAL OFFICE" shall mean the principal office of JPMorgan Chase
Bank, N.A., presently located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"PROXY STATEMENT" means the Proxy Statement of the Company for the
Annual Meeting of Stockholders dated as of September 22, 2004.
"QUARTERLY DATE" means each March 31, June 30, September 30 and
December 31.
"RATE FIXING DATE" means, with respect to any Interest Period, the
day on which quotes for deposits in the relevant currency for such Interest
Period are customarily taken in the London interbank market for delivery on the
first day of such Interest Period.
"REFERENCE BANKS" means the principal London offices of JPMorgan
Chase Bank, N.A. and one or more Lenders selected by the Administrative Agent
from time to time.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT OBLIGATION" has the meaning set forth in Section
2.19(d).
"REQUIRED LENDERS" means at any time Lenders having in excess of 50%
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding more than 50% of the Total Outstanding Amount.
"REVOLVING CREDIT PERIOD" means the period from and including the
Effective Date to but not including the earlier of the Termination Date and the
date of termination of the Commitments.
"SENIOR OFFICER" means, with respect to any Person, the chief
executive officer, the chief operating officer, the president, the chief
financial officer, the general counsel, the chief accounting officer or the
treasurer of such Person (or in any case persons having substantially similar
responsibilities regardless of title).
"SIGNIFICANT SUBSIDIARY" means at any time a Subsidiary that as at
that time would be a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X promulgated by the Securities and Exchange Commission as in
effect on the date hereof; provided that the Company Guarantor and each Eligible
Subsidiary shall always be deemed to be a Significant Subsidiary.
"SPC" has the meaning specified in Section 10.06(f).
"STERLING" means the lawful currency of the United Kingdom.
17
"SUBSIDIARY" means, as to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of the Company.
"SWISS FRANCS" means the lawful currency of the Swiss Confederation.
"TERMINATION DATE" means May 27, 2010, or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"TOTAL CAPITAL" means, at any date, the sum of (x) Consolidated Debt
plus (y) consolidated stockholders' equity of the Company and its Consolidated
Subsidiaries (excluding for this purpose any amount attributable to stock which
is required to be redeemed, or is redeemable at the option of the holder, if
certain events or conditions occur or exist or otherwise) plus (z) (a) shares of
the Company's Series A cumulative redeemable preferred stock, par value $.01 per
share, due June 2015 outstanding on the date of this Agreement (the "EXISTING
PREFERRED STOCK") and (b) any shares of preferred stock of the Company (i) that
are issued in exchange for the Existing Preferred Stock or the proceeds from the
issuance of which have been used to redeem or repurchase the Existing Preferred
Stock, (ii) which is not required to be redeemed, nor is redeemable at the
option of the holder, if certain events or conditions occur or exist or
otherwise, on or prior to the Termination Date, except for those events or
conditions contained in the Existing Preferred Stock, and (iii) the other terms
of which are no less favorable to the Borrowers or the Lenders than those of the
Existing Preferred Stock, in each case determined at such date.
"TOTAL OUTSTANDING AMOUNT" means, at any time, the aggregate Dollar
Amount of all Loans outstanding at such time plus the aggregate Dollar Amount of
the Letter of Credit Liabilities of all Lenders at such time.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"UNITED STATES" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
18
"WHOLLY-OWNED CONSOLIDATED SUBSIDIARY" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except for qualifying shares held by directors or foreign nationals in
accordance with applicable law) are at the time directly or indirectly owned by
the Company or one or more other Wholly-Owned Consolidated Subsidiaries.
"YEN" means the lawful currency of Japan.
Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Company's
independent public accountants) with the most recent audited consolidated
financial statements of the Company and its Consolidated Subsidiaries delivered
to the Lenders; provided that, if the Company notifies the Administrative Agent
that the Company wishes to amend any covenant in Article 5 to eliminate the
effect of any change in generally accepted accounting principles on the
operation of such covenant (or if the Administrative Agent notifies the Company
that the Required Lenders wish to amend Article 5 for such purpose), then the
Company's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Company and the Required Lenders.
Section 1.03. Types of Borrowing. The term "BORROWING" denotes the
aggregation of Loans of one or more Lenders to be made to a single Borrower
pursuant to Article 2 on the same date, all of which Loans are of the same type
and currency (subject to Article 8) and, except in the case of Base Rate Loans,
have the same initial Interest Period. Borrowings are classified for purposes of
this Agreement either (a) by reference to the currency and/or pricing of Loans
comprising such Borrowing (e.g., a "Fixed Rate Borrowing" is a Euro-Currency
Borrowing or a Competitive Bid Borrowing (excluding any such Borrowing
consisting of Competitive Bid LIBOR Loans bearing interest at the Base Rate
pursuant to Section 8.01), and a "Euro-Currency Borrowing" is a Borrowing
comprised of Euro-Currency Loans), or (b) by reference to the provisions of
Article 2 under which participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all Lenders participate in
proportion to their Commitments, while a "Competitive Bid Borrowing" is a
Borrowing under Section 2.03 in which the Lender participants are determined on
the basis of their bids in accordance therewith).
19
ARTICLE 2
THE CREDITS
Section 2.01. Commitments To Lend. During the Revolving Credit
Period, each Lender severally agrees, on the terms and conditions set forth in
this Agreement, to make Loans denominated in Dollars or in an Alternative
Currency to any Borrower pursuant to this Section 2.01(a) from time to time in
amounts such that (i) such Lender's Outstanding Committed Amount shall not
exceed the amount of its Commitment, (ii) the Total Outstanding Amount shall not
exceed the aggregate amount of the Commitments and (iii) the sum of the
aggregate Dollar Amount of the aggregate principal amount of all outstanding
Committed Alternative Currency Loans plus the aggregate Dollar Amount of the
aggregate Letter of Credit Liabilities for Letters of Credit in an Alternative
Currency shall not exceed the Alternative Currency Sublimit. Each Borrowing
under this Section 2.01(a) shall be (x) in the case of a Dollar-Denominated
Borrowing, in a minimum aggregate Dollar Amount of $20,000,000 and any larger
multiple of $1,000,000 and (y) in the case of an Alternative Currency Borrowing,
in a minimum aggregate Dollar Amount of $5,000,000 and in integral multiples of
500,000 units of the applicable Alternative Currency (except that any such
Borrowing may be in the aggregate amount available in accordance with this
Section 2.01(a) and Section 3.02) and shall be made from the several Lenders
ratably in proportion to their respective Available Commitments.
(b) Within the foregoing limits, any Borrower may borrow under this
Section, repay, or to the extent permitted by Section 2.12, prepay Loans and
reborrow at any time during the Revolving Credit Period under this Section.
Section 2.02. Notice of Committed Borrowing. A Borrower shall give
the Applicable Agent notice (a "NOTICE OF COMMITTED BORROWING") not later than
10:30 A.M. (New York City time) on (x) the date of each Base Rate Borrowing, (y)
the third Euro-Dollar Business Day before each Euro-Dollar Borrowing and (z) the
third Euro-Currency Business Day before (or, solely in the case of Alternative
Currency Borrowings denominated in Sterling, telephonic notice (such telephonic
notice to be confirmed promptly in writing) not later than 5:00 A.M. (New York
City time) on the Euro-Currency Business Day of) each Alternative Currency
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Currency
Business Day in the case of a Euro-Currency Borrowing;
(ii) the currency and the aggregate amount in the relevant
currency and the Dollar Amount of such Borrowing, provided that if no
currency is specified with respect to any requested Borrowing, then
the Borrower shall be deemed to have selected Dollars;
20
(iii) in the case of Committed Dollar Loans, whether the
Loans comprising such Borrowing are to bear interest initially at the
Base Rate or a Euro-Currency Rate; and
(iv) in the case of a Euro-Currency Borrowing, the
duration of the initial Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period, and, in the
case of an Alternative Currency Borrowing, the location from which
payments of the principal and interest on such Alternative Currency
Borrowing will be made, which will comply with the requirements of
Section 2.14.
Section 2.03. Competitive Bid Borrowings. (a) The Competitive Bid
Option. In addition to Committed Borrowings pursuant to Section 2.01, any
Borrower may, as set forth in this Section, request the Lenders during the
Revolving Credit Period to make offers to make Competitive Bid Loans to such
Borrower. The Lenders may, but shall have no obligation to, make such offers and
a Borrower may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section.
(b) Competitive Bid Quote Request. When a Borrower wishes to request
offers to make Competitive Bid Loans under this Section, it shall transmit to
the Administrative Agent by telex or facsimile transmission a Competitive Bid
Quote Request substantially in the form of Exhibit B hereto so as to be received
not later than 10:30 A.M. (New York City time) on (x) the fourth Euro-Dollar
Business Day prior to the date of Borrowing proposed therein, in the case of a
LIBOR Auction or (y) the Business Day prior to the date of Borrowing proposed
therein, in the case of an Absolute Rate Auction (or, in either case, such other
time or date as such Borrower and the Administrative Agent shall have mutually
agreed and shall have notified to the Lenders not later than the date of the
Competitive Bid Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction in dollars,
(ii) the proposed currency of such Borrowing,
(iii) the aggregate amount of such Borrowing, which shall
be (x) in the case of a Dollar-Denominated Borrowing, in a minimum
aggregate Dollar Amount of $20,000,000 and any larger multiple of
$1,000,000 and (y) in the case of an Alternative Currency Borrowing,
in a minimum aggregate Dollar Amount of $5,000,000 and in integral
multiples of 500,000 units of the applicable Alternative Currency,
21
(iv) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
(v) whether the Competitive Bid Quotes requested are to
set forth a Competitive Bid Margin or a Competitive Bid Absolute
Rate.
A Borrower may request offers to make Competitive Bid Loans for more than one
Interest Period in a single Competitive Bid Quote Request. No Competitive Bid
Quote Request shall be given within four Euro-Dollar Business Days (or such
other number of days as the applicable Borrower and the Administrative Agent may
agree) of any other Competitive Bid Quote Request.
(c) Invitation for Competitive Bid Quotes. Promptly upon receipt of a
Competitive Bid Quote Request, the Administrative Agent shall send to the
Lenders by telex or facsimile transmission an Invitation for Competitive Bid
Quotes substantially in the form of Exhibit C hereto, which shall constitute an
invitation by the applicable Borrower to each Lender to submit Competitive Bid
Quotes offering to make the Competitive Bid Loans to which such Competitive Bid
Quote Request relates in accordance with this Section.
(d) Submission and Contents of Competitive Bid Quotes. (i) Each
Lender may submit a Competitive Bid Quote containing an offer or offers to make
Competitive Bid Loans in response to any Invitation for Competitive Bid Quotes.
Each Competitive Bid Quote must comply with the requirements of this subsection
(d) and must be submitted to the Administrative Agent by telex or facsimile
transmission at its offices specified in or pursuant to Section 10.01 not later
than (x) 9:30 A.M. (New York City time) on the third Euro-Dollar Business Day
prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y)
9:30 A.M. (New York City time) on the proposed date of Borrowing, in the case of
an Absolute Rate Auction (or, in either case, such other time or date as the
applicable Borrower and the Administrative Agent shall have mutually agreed and
shall have notified to the Lenders not later than the date of the Competitive
Bid Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective); provided that Competitive Bid Quotes submitted
by the Administrative Agent (or any affiliate of the Administrative Agent) in
the capacity of a Lender may be submitted, and may only be submitted, if the
Administrative Agent or such affiliate notifies the Borrower of the terms of the
offer or offers contained therein not later than (x) one hour prior to the
deadline for the other Lenders, in the case of a LIBOR Auction or (y) 15 minutes
prior to the deadline for the other Lenders, in the case of an Absolute Rate
Auction. Subject to Articles 3 and 6, any Competitive Bid Quote so made shall be
irrevocable except with the written consent of the Administrative Agent given on
the instructions of the applicable Borrower.
22
(ii) Each Competitive Bid Quote shall be substantially in
the form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Competitive Bid
Loan for which each such offer is being made, which
principal amount (w) may be greater than or less than the
Commitment of the quoting Lender, (x) must be (1) in the
case of a Dollar-Denominated Borrowing, $5,000,000 or a
larger multiple of $1,000,000 and (2) in the case of an
Alternative Currency Borrowing, $500,000 or an integral
multiple of 500,000 units of the applicable Alternative
Currency, (y) may not exceed the principal amount of
Competitive Bid Loans for which offers were requested and
(z) may be subject to an aggregate limitation as to the
principal amount of Competitive Bid Loans for which offers
being made by such quoting Lender may be accepted,
(C) in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank Offered
Rate (the "COMPETITIVE BID MARGIN") offered for each such
Competitive Bid Loan, expressed as a percentage (specified
to the nearest 1/10,000th of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction,
the rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "COMPETITIVE BID ABSOLUTE RATE")
offered for each such Competitive Bid Loan, and
(E) the identity of the quoting Lender.
A Competitive Bid Quote may set forth up to five separate offers by the quoting
Lender with respect to each Interest Period specified in the related Invitation
for Competitive Bid Quotes.
(iii) Any Competitive Bid Quote shall be disregarded if
it:
(A) is not substantially in conformity with
Exhibit D hereto or does not specify all of the
information required by subsection (d)(ii) above;
(B) contains qualifying, conditional or similar
language;
23
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for
Competitive Bid Quotes; or
(D) arrives after the time set forth in
subsection (d)(i).
(e) Notice to Borrower. The Administrative Agent shall promptly
notify the applicable Borrower of the terms (x) of any Competitive Bid Quote
submitted by a Lender that is in accordance with subsection (d) and (y) of any
Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid Quote submitted by such Lender with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall
be disregarded by the Administrative Agent unless such subsequent Competitive
Bid Quote is submitted solely to correct a manifest error in such former
Competitive Bid Quote. The Administrative Agent's notice to the applicable
Borrower shall specify (A) the aggregate principal amount of Competitive Bid
Loans for which offers have been received for each Interest Period specified in
the related Competitive Bid Quote Request, (B) the respective principal amounts
and Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may
be, so offered and (C) if applicable, limitations on the aggregate principal
amount of Competitive Bid Loans for which offers in any single Competitive Bid
Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M. (New
York City time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Lenders not later than the date
of the Competitive Bid Quote Request for the first LIBOR Auction or Absolute
Rate Auction for which such change is to be effective), the applicable Borrower
shall notify the Administrative Agent of its acceptance or non-acceptance of the
offers so notified to it pursuant to subsection (e). In the case of acceptance,
such notice (a "NOTICE OF COMPETITIVE BID BORROWING") shall specify the
aggregate principal amount of offers for each Interest Period that are accepted.
The applicable Borrower may accept any Competitive Bid Quote in whole or in
part; provided that:
(i) the aggregate principal amount of each Competitive Bid
Borrowing may not exceed the applicable amount set forth in the
related Competitive Bid Quote Request;
(ii) the principal amount of each Competitive Bid
Borrowing must be (x) in the case of a Dollar-Denominated Borrowing,
in a minimum aggregate Dollar Amount of $20,000,000 and any larger
multiple of $1,000,000 and (y) in the case of an Alternative Currency
24
Borrowing, in a minimum aggregate Dollar Amount of $5,000,000 and in
integral multiples of 500,000 units of the applicable Alternative
Currency;
(iii) acceptance of offers may only be made on the basis
of ascending Competitive Bid Margins or Competitive Bid Absolute
Rates, as the case may be; and
(iv) the applicable Borrower may not accept any offer that
is described in subsection (d)(iii) or that otherwise fails to comply
with the requirements of this Agreement.
(g) Allocation by Administrative Agent. If offers are made by two or
more Lenders with the same Competitive Bid Margins or Competitive Bid Absolute
Rates, as the case may be, for a greater aggregate principal amount than the
amount in respect of which such offers are accepted for the related Interest
Period, the principal amount of Competitive Bid Loans in respect of which such
offers are accepted shall be allocated by the Administrative Agent among such
Lenders as nearly as possible (as the Administrative Agent may deem appropriate)
in proportion to the aggregate principal amounts of such offers. Determinations
by the Administrative Agent of the amounts of Competitive Bid Loans shall be
conclusive in the absence of manifest error.
Section 2.04. Notice To Lenders; Funding of Loans. Upon receipt of a
Notice of Borrowing, the Applicable Agent shall promptly notify each Lender of
the contents thereof and of such Lender's share (if any) of such Borrowing and
such Notice of Borrowing shall not thereafter be revocable by the applicable
Borrower.
(b) On the date of each Borrowing, each Lender participating therein
shall (except as provided in subsection (c) of this Section):
(1) if such Borrowing is to be made in dollars, make
available its share of such Borrowing in dollars not later than 12:00
Noon (New York City time), in Federal or other funds immediately
available in New York City, to the Administrative Agent at its office
specified in or pursuant to Section 10.01; or
(2) if such Borrowing is to be made in an Alternative
Currency, make available its share of such Borrowing in such
Alternative Currency (in such funds as may then be customary for the
settlement of international transactions in such Alternative
Currency) to the account of the Applicable Agent at such time and
place as shall have been notified by the Applicable Agent to the
Lenders by at least three Euro-Currency Business Days' notice (or,
solely in the case of such Borrowing denominated in Sterling, by
25
telephonic notice on the Euro-Currency Business Day of the date of
such Borrowing, such notice to be promptly confirmed in writing).
(c) Unless the Applicable Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Applicable Agent such Lender's share of such Borrowing, the
Applicable Agent may assume that such Lender has made such share available to
the Applicable Agent on the date of such Borrowing in accordance with subsection
(b) of this Section and the Applicable Agent may, in reliance upon such
assumption, make available to the applicable Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such share available to the Applicable Agent, such Lender and the
applicable Borrower severally agree to repay to the Applicable Agent forthwith
on demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the applicable Borrower until the
date such amount is repaid to the Applicable Agent, at (i) in the case of the
applicable Borrower, a rate per annum equal to the higher of the Federal Funds
Rate and the interest rate applicable thereto pursuant to Section 2.07 and (ii)
in the case of such Lender, the Federal Funds Rate (if such Borrowing is in
dollars) or the applicable London Interbank Offered Rate (if such Borrowing is
in an Alternative Currency). If such Lender shall repay to the Applicable Agent
such corresponding amount, such amount so repaid shall constitute such Lender's
Loan included in such Borrowing for purposes of this Agreement.
Section 2.05. Evidence Of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of each Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender by such Borrower from time to time hereunder.
(b) The Administrative Agent shall maintain accounts in which it
shall record (i) the Dollar Amount of each Loan made to a Borrower hereunder,
the class, type and, in the case of any Committed Alternative Currency Loans,
currency thereof and the Interest Period (if any) applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from each Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder for the account of the Lenders
and each Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to paragraph
(a) or (b) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
26
therein shall not in any manner affect the obligation of each Borrower to repay
the Lenders in accordance with the terms of this Agreement.
(d) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the applicable Borrower shall prepare, execute
and deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns)
substantially in the form of Exhibit A hereto. Thereafter, the Loans evidenced
by each such promissory note and interest thereon shall at all times (including
after assignment pursuant to Section 10.06) be represented by one or more
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns). Each reference in this Agreement to the "NOTE" of such
Lender shall be deemed to refer to and include any or all of such Notes.
Section 2.06. Maturity of Loans. (a) Each Committed Loan shall
mature, and the principal amount thereof shall be due and payable, together with
accrued interest thereon, on the Termination Date.
(b) Each Competitive Bid Loan shall mature, and the principal amount
thereof shall be due and payable, together with accrued interest thereon, on the
last day of the Interest Period applicable to such Loan.
Section 2.07. Interest Rates. Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the Base Rate
for such day. Such interest shall be payable quarterly in arrears on each
Quarterly Date and, with respect to the principal amount of any Base Rate Loan
converted to a Euro-Dollar Loan, on each date a Base Rate Loan is so converted.
Any overdue principal of or interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the rate otherwise applicable to Base Rate Loans for such day.
(b) Each Euro-Currency Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Currency Margin plus
the London Interbank Offered Rate applicable to such Interest Period. Such
interest shall be payable for each Interest Period on the last day thereof and,
if such Interest Period is longer than three months, at intervals of three
months after the first day of such Interest Period.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the rate appearing on "Page BBAM 1" on the Bloomberg Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
27
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to deposits in the relevant currency in the London interbank market)
at approximately 11:00 a.m., London time, two Business Days before the beginning
(or, solely in the case of Borrowings denominated in Sterling, on the first day)
of such Interest Period, as the rate for deposits in the relevant currency with
a maturity comparable to such Interest Period. If such rate is not available at
such time for any reason, then the "LONDON INTERBANK OFFERED RATE" with respect
to such Interest Period shall be the average (rounded upward, if necessary, to
the next higher 1/16 of 1%) of the respective rates per annum at which deposits
in the relevant currency are offered to each of the Reference Banks in the
London interbank market at approximately 11:00 A.M. (London time) on the Rate
Fixing Date in an amount approximately equal to the principal amount of the
Euro-Currency Loan of such Reference Bank to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
(c) Any overdue principal of or interest on any Euro-Currency Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the higher of (i) the sum of 2% plus the Euro-Currency Margin
plus the London Interbank Offered Rate applicable to the Interest Period for
such Loan and (ii) the sum of 2% plus the Euro-Currency Margin plus the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which one day (or, if such amount due remains unpaid more
than three Euro-Currency Business Days, then for such other period of time not
longer than three months as the Administrative Agent may select) deposits in the
relevant currency in an amount approximately equal to such overdue payment due
to each of the Reference Banks are offered to such Reference Bank in the London
interbank market for the applicable period determined as provided above (or, if
the circumstances described in clause (a) or (b) of Section 8.01 shall exist, at
a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day).
(d) Subject to Section 8.01, each Competitive Bid LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.07(b) as if the related Competitive Bid LIBOR Borrowing were a
Committed Euro-Dollar Borrowing) plus (or minus) the Competitive Bid Margin
quoted by the Lender making such Loan in accordance with Section 2.03. Each
Competitive Bid Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the Competitive Bid Absolute Rate quoted by the Lender making
such Loan in accordance with Section 2.03. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
28
longer than three months, at intervals of three months after the first day
thereof.
(e) Any overdue principal of or interest on any Competitive Bid Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2% plus the Base Rate for such day.
(f) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the applicable Borrower and the participating Lenders of each rate of
interest so determined, and its determination thereof shall be conclusive in the
absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Administrative Agent
shall determine the relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section 8.01
shall apply.
Section 2.08. Fees. (a) The Company shall pay to the Administrative
Agent for the account of the Lenders ratably a facility fee (the "FACILITY
FEE"), which shall accrue at the Facility Fee Rate (i) from and including the
Effective Date to but excluding the date of termination of the Commitments in
their entirety, on the average daily aggregate amount of the Commitments
(whether used or unused) and (ii) from and including such date of termination to
but excluding the date the Loans shall be repaid in their entirety, on the
average daily aggregate outstanding principal Dollar Amount of the Loans.
(b) The Company shall pay to the Administrative Agent (i) for the
account of the Lenders ratably a letter of credit fee in Dollars accruing daily
on the aggregate Dollar Amount of all outstanding Letters of Credit at the
Letter of Credit Fee Rate (determined daily in accordance with the Pricing
Schedule) and (ii) for the account of the Issuing Lender a letter of credit
fronting fee accruing daily on the aggregate Dollar Amount of all Letters of
Credit issued by the Issuing Lender at a rate per annum mutually agreed from
time to time by the Company and the Issuing Lender. The Company shall also pay
to the Issuing Lender for its own account issuance, drawing, amendment and
extension charges in the amounts and at the times as agreed between the Company
and the Issuing Lender.
(c) Accrued fees under this Section shall be payable quarterly in
arrears on each Quarterly Date and on the date of termination of the Commitments
in their entirety (and, in the case of clause (a), if later, the date the Loans
29
shall be repaid in their entirety and, in the case of clause (b), if later, the
date on which all Letters of Credit shall have been terminated).
Section 2.09. Optional Termination or Reduction of Commitments.
During the Revolving Credit Period, the Company may, upon at least three
Domestic Business Days' notice to the Administrative Agent, (i) terminate the
Commitments at any time, if no Loans or Letter of Credit Liabilities are
outstanding at such time or (ii) ratably reduce from time to time by an
aggregate amount of $20,000,000 or a larger multiple of $1,000,000, the
aggregate amount of the Commitments in excess of the Total Outstanding Amount.
Section 2.10. Method of Electing Interest Rates. (a) The Committed
Dollar Loans included in each Committed Borrowing shall bear interest initially
at the type of rate specified by the applicable Borrower in the applicable
Notice of Committed Dollar Borrowing. Thereafter, the applicable Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Group of Committed Dollar Loans (subject in each case to Section 2.07(c)
and the provisions of Article 8 and the last sentence of this subsection (a)),
as follows:
(i) if such Loans are Base Rate Loans, the applicable
Borrower may elect to convert such Loans to Euro-Dollar Loans as of
any Euro-Dollar Business Day; and
(ii) if such Loans are Euro-Dollar Loans, the applicable
Borrower may elect to convert such Loans to Base Rate Loans as of any
Domestic Business Day, or elect to continue such Loans as Euro-Dollar
Loans for an additional Interest Period as of any Euro-Dollar
Business Day, subject to Section 2.15 in the case of any such
conversion or continuation effective on any day other than the last
day of the then current Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF INTEREST
RATE ELECTION") to the Administrative Agent not later than 10:00 A.M. (New York
City time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective. A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the aggregate
principal Dollar Amount of the relevant Group of Loans; provided that (i) such
portion is allocated ratably among the Loans comprising such Group and (ii) the
portion to which such Notice applies, and the remaining portion to which it does
not apply, are each (x) in the case of a Dollar-Denominated Borrowing,
$20,000,000 or any larger multiple of $1,000,000 and (y) in the case of an
Alternative Currency Borrowing, $5,000,000 or an integral multiple of 500,000
units of the applicable Alternative Currency. If no Notice of Interest Rate
Election is timely delivered prior to the end of an Interest Period for any
Euro-Dollar Loan, the Borrower shall be deemed to have elected that all Loans
30
having such Interest Period shall be converted to Base Rate Loans effective as
of the last day of such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply with
the applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if the Loans being converted
are to be Euro-Dollar Loans, the duration of the next succeeding
Interest Period applicable thereto; provided that, if at the time
such notice is delivered an Event of Default has occurred and is
continuing, the duration of the Interest Period with respect to any
Euro-Dollar Loans to which such notice applies shall be one month;
and
(iv) if such Loans are to be continued as Euro-Dollar
Loans for an additional Interest Period, the duration of such
additional Interest Period; provided that, if at the time such notice
is delivered an Event of Default has occurred and is continuing, the
duration of the Interest Period with respect to any Euro-Dollar Loans
to which such notice applies shall be one month.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
applicable Borrower pursuant to subsection (a) above, the Administrative Agent
shall promptly notify each Lender of the contents thereof and such notice shall
not thereafter be revocable by such Borrower.
(d) A Borrower shall not be entitled to elect to convert any
Committed Dollar Loans to, or continue any Committed Dollar Loans for an
additional Interest Period as, Euro-Dollar Loans, in each case made to it, if a
Default shall have occurred and be continuing when such Borrower delivers notice
of such election to the Administrative Agent.
(e) An election by any Borrower to change or continue the rate of
interest applicable to any Group of Loans pursuant to this Section shall not
constitute a "BORROWING" subject to the provisions of Section 3.02.
31
(f) The initial Interest Period for each Group of Committed
Alternative Currency Loans shall be specified by the applicable Borrower in the
applicable Notice of Borrowing. The applicable Borrower may specify the duration
of each subsequent Interest Period applicable to such Group of Loans by
delivering to the Administrative Agent, not later than 10:30 A.M. (New York City
time) on the third Euro-Currency Business Day before the end of the immediately
preceding Interest Period, a notice specifying the Group of Loans to which such
notice applies and the duration of such subsequent Interest Period (which shall
comply with the provisions of the definition of Interest Period). Such notice
may, if it so specifies, apply to only a portion of the aggregate principal
amount of the relevant Group of Loans; provided that (i) such portion is
allocated ratably among the Loans comprising such Group and (ii) the Dollar
Amounts of the portion to which such notice applies, and the remaining portion
to which it does not apply, are each at least $5,000,000 and shall be in
integral multiples of 500,000 units of the relevant Alternative Currency. If no
such notice is timely received by the Administrative Agent before the end of any
applicable Interest Period, the applicable Borrower shall be deemed to have
elected that the subsequent Interest Period for such Group of Loans shall have a
duration of one month (subject to the provisions of the definition of Interest
Period).
Section 2.11. Mandatory Termination of Commitments. Unless
previously terminated, the Commitments shall terminate on the Termination Date
and any Loans then outstanding (together with accrued interest thereon) shall be
due and payable on such date.
Section 2.12. Optional Prepayments. Subject in the case of any Fixed
Rate Borrowing to Section 2.15, each Borrower may, upon at least one Domestic
Business Day's notice to the Administrative Agent, prepay any Base Rate
Borrowing (or any Competitive Bid Borrowing bearing interest at the Base Rate
pursuant to Section 8.01) made to it or upon at least three Euro-Currency
Business Days' notice to the Administrative Agent and the Applicable Agent (if
different), prepay any Euro-Currency Borrowing made to it, in each case in whole
at any time, or from time to time in part in an aggregate Dollar Amount not less
than $20,000,000 or in the case of any Loan denominated in dollars, any larger
multiple of $1,000,000, or in the case of any Committed Alternative Currency
Loan in an aggregate Dollar Amount not less than $5,000,000 or any larger
integral multiple of 500,000 units of the relevant Alternative Currency, by
paying (in the relevant currency) the principal Dollar Amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Lenders included in such Borrowing.
(b) A Borrower may not prepay all or any portion of the principal
amount of any Competitive Bid Loan made to it prior to the maturity thereof
except (i) as provided in subsection (a) above or (ii) with respect to any
particular Competitive Bid Loan, as agreed upon between the Lender making such
32
Loan and such Borrower so long as at the time such Borrower makes such
prepayment no Default has occurred and is continuing.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Lender of the contents
thereof and of such Lender's ratable share (if any) of such prepayment and such
notice shall not thereafter be revocable by the applicable Borrower.
Section 2.13. Determining Dollar Amounts of Committed Alternative
Currency Loans; Related Mandatory Prepayments. The Administrative Agent shall
determine the Dollar Amount of each Committed Alternative Currency Loan promptly
after it receives the related Notice of Committed Borrowing, based on the
Exchange Rate on the third Euro-Currency Business Day before (or, solely in the
case of Alternative Currency Borrowings denominated in Sterling, on) the date of
Borrowing specified in such notice. Thereafter, the Administrative Agent shall
redetermine the Dollar Amount of each Committed Alternative Currency Loan on the
last Euro-Currency Business Day of each calendar month while such Loan remains
outstanding, based in each case on the Exchange Rate on such Euro-Currency
Business Day. The Administrative Agent shall promptly notify the applicable
Borrower and the participating Lenders of each Dollar Amount so determined, and
its determination thereof shall be conclusive in the absence of manifest error.
(b) The Administrative Agent shall determine the Dollar Amount of the
Letter of Credit Liabilities related to each Letter of Credit promptly after it
receives the related Notice of Issuance, based on the Exchange Rate on the third
Euro-Currency Business Day before (or, solely in the case of a Letter of Credit
denominated in Sterling, on) the date of issuance specified in such notice.
Thereafter, the Administrative Agent shall redetermine the Dollar Amount of each
Letter of Credit on the last Euro-Currency Business Day of each calendar month
while such Letter of Credit remains outstanding, based in each case on the
Exchange Rate on such Euro-Currency Business Day. The Administrative Agent shall
promptly notify the applicable Borrower and the participating Lenders of each
Dollar Amount so determined, and its determination thereof shall be conclusive
in the absence of manifest error.
(c) If, (i) on the last day of any Interest Period for any Borrowing,
the Total Outstanding Amount at such time exceeds the aggregate amount of
Commitments, the relevant Borrower shall, on such day, prepay Committed Loans
included in such Borrowing in an amount equal to the lesser of (x) such excess
and (y) the amount of such Borrowing and (ii) on the last day of any Interest
Period for any Committed Alternative Currency Borrowing, the Dollar Amount of
the aggregate principal amount of outstanding Alternative Currency Loans exceeds
the Alternative Currency Sublimit, the relevant Borrower shall, on such date,
33
prepay Committed Alternative Currency Loans included in such Borrowing in an
amount equal to the lesser of (x) such excess and (y) the amount of such
Borrowing.
(d) If, on the last Euro-Currency Business Day of any calendar month,
after any redetermination of the Dollar Amounts pursuant to Section 2.13(a), the
Total Outstanding Amount at such time exceeds 105% of the aggregate amount of
Commitments, then the Borrowers shall, on the last Euro-Currency Business Day of
the next calendar month (the "PREPAYMENT DATE"), prepay one or more Groups of
Borrowings in an aggregate principal amount equal to the excess, if any, of the
Total Outstanding Amount as of such Prepayment Date over the then outstanding
Commitments.
(e) If, on the last Euro-Currency Business Day of any calendar month,
after any redetermination of the Dollar Amounts pursuant to Section 2.13(a), the
aggregate Dollar Amount of the aggregate Committed Alternative Currency Loans
exceeds 105% of the Alternative Currency Sublimit, then the Borrowers shall, on
the Prepayment Date, prepay one or more Groups of Borrowings in an aggregate
principal amount equal to the excess, if any, of the aggregate Dollar Amount of
the aggregate Committed Alternative Currency Loans as of such Prepayment Date
over the Alternative Currency Sublimit.
Section 2.14. General Provisions as to Payments. (a) Each Borrower
shall make each payment of principal of, and interest on, the Loans and Letter
of Credit Liabilities denominated in Dollars and of fees hereunder, not later
than 12:00 Noon (New York City time) on the date when due, in Federal or other
funds immediately available in New York City, without defense, set-off or
counterclaim and free of any restriction or condition, to the Administrative
Agent at its address referred to in Section 10.01. Each Borrower shall make each
payment of principal of, and interest on, the Committed Alternative Currency
Loans in the relevant Alternative Currency in such funds as may then be
customary for the settlement of international transactions in such Alternative
Currency, to such account and at such time and at such place as shall have been
notified by the Applicable Agent to such Borrower and the Lenders by at least
three Euro-Currency Business Days' notice (or, solely in the case of Alternative
Currency Borrowings denominated in Sterling, by at least one Euro-Currency
Business Days' notice). The Borrower may specify in any notice delivered to the
Administrative Agent and the Applicable Agent with respect to any Alternative
Currency, one or more locations from which such Borrower may make payments of
principal or of interest on any Committed Alternative Currency Loan in such
Alternative Currency; provided that the Administrative Agent approve such
location. The Applicable Agent will promptly distribute to each Lender its
ratable share of each such payment received by the Administrative Agent for the
account of the Lenders. Whenever any payment of principal of, or interest on,
the Base Rate Loans, Letter of Credit Liabilities denominated in Dollars or of
34
fees shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, the Euro-Currency Loans
shall be due on a day which is not a Euro-Currency Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Currency Business
Day unless such Euro-Currency Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding
Euro-Currency Business Day. Whenever any payment of principal of, or interest
on, the Competitive Bid Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day. Whenever any payment of principal of or
interest on Letter of Credit Liabilities denominated in an Alternative Currency
shall be due on a day which is not a Euro-Currency Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Currency Business
Day. If the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment is due to the Lenders hereunder
that such Borrower will not make such payment in full, the Administrative Agent
may assume that such Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent that such
Borrower shall not have so made such payment, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate (if such amount was distributed
in dollars) or (ii) the rate per annum at which one-day deposits in the relevant
currency are offered to the Administrative Agent in the London interbank market
for such day (if such amount was distributed in an Alternative Currency).
Section 2.15. Funding Losses. If a Borrower makes any payment of
principal with respect to any Fixed Rate Loan, any Fixed Rate Loan is converted
(pursuant to Article 2, 6 or 8 or otherwise) or continued on any day other than
the last day of an Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.07(c), or if any Committed
Alternative Currency Loan is converted to a Loan denominated in dollars pursuant
to Article 8, or if a Borrower fails to borrow, prepay, convert or continue any
Fixed Rate Loans after notice has been given to any Lender in accordance with
Section 2.04(a), 2.12(a) or Section 2.10, respectively, such Borrower shall
reimburse each Lender within 15 days after demand for any resulting loss or
expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
35
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such prepayment or conversion or continuation or
failure to borrow, prepay, convert or continue; provided that such Lender shall
have delivered to such Borrower and the Administrative Agent a certificate as to
the amount of such loss or expense and setting forth the calculation thereof in
reasonable detail, which certificate shall be conclusive in the absence of
manifest error.
Section 2.16. Computation of Interest and Fees. Interest based on the
Prime Rate and, in the case of Committed Alternative Currency Loans denominated
in Sterling, the Euro-Currency Rate hereunder shall be computed on the basis of
a year of 365 days (or 366 days in a leap year) and paid for the actual number
of days elapsed (including the first day but excluding the last day). All other
interest and fees shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding the
last day); provided that if the Administrative Agent reasonably determines that
a different basis of computation is the market convention for a particular
Alternative Currency, such different basis shall be used.
Section 2.17. [Intentionally Omitted]
Section 2.18. Regulation D Compensation. (a) Each Lender may require
each Borrower to pay, contemporaneously with each payment of interest on the
Euro-Currency Loans, additional interest on the related Euro-Currency Loan of
such Lender at a rate per annum determined by such Lender up to but not
exceeding the excess of (i) (A) the applicable London Interbank Offered Rate
divided by (B) one minus the Euro-Currency Reserve Percentage over (ii) the
applicable London Interbank Offered Rate. Any Lender wishing to require payment
of such additional interest (x) shall so notify such Borrower and the
Administrative Agent, in which case such additional interest on the
Euro-Currency Loans of such Lender shall be payable to such Lender at the place
indicated in such notice with respect to each Interest Period commencing at
least three Euro-Currency Business Days after the giving of such notice and (y)
shall notify such Borrower at least five Euro-Currency Business Days prior to
each date on which interest is payable on the Euro-Currency Loans of the amount
then due it under this Section.
(b) If and so long as any Lender is required to make special deposits
with the Bank of England, to maintain reserve asset ratios or to pay fees in
respect of such Lender's Euro-Currency Loans, such Lender may require each
Borrower to pay, contemporaneously with each payment of interest on each of such
Loans, additional interest on such Loan at a rate per annum equal to the
Mandatory Costs Rate calculated in accordance with the formula and in the manner
set forth in Exhibit H hereto.
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(c) If and so long as any Lender is required to comply with reserve
assets, liquidity, cash margin or other requirements of any monetary or other
authority (including any such requirement imposed by the European Central Bank
or the European System of Central Banks, but excluding requirements referred to
in subsections (a) and (b) above) in respect of any of such Lender's
Euro-Currency Loans, such Lender may require each Borrower to pay,
contemporaneously with each payment of interest on each of such Lender's
Euro-Currency Loans subject to such requirements, additional interest on such
Loan at a rate per annum specified by such Lender to be the cost to such Lender
of complying with such requirements in relation to such Loan.
(d) Any additional interest owed pursuant to subsection (a), (b) or
(c) above shall be determined by the relevant Lender, which determination shall
be conclusive and binding for all purposes except in the case of manifest error,
and notified to each Borrower (with a copy to the Administrative Agent) at least
five Euro-Currency Business Days before each date on which interest is payable
for the relevant Loan, and such additional interest so notified to such Borrower
by such Lender shall be payable to the Administrative Agent for the account of
such Lender on each date on which interest is payable for such Loan.
Section 2.19. Letters of Credit. (a) Subject to the terms and
conditions hereof, the Issuing Lender agrees to issue Letters of Credit
hereunder denominated in Dollars or in an Alternative Currency from time to time
until the tenth day prior to the Termination Date upon the request of the
Company for its account or the account of any Subsidiary; provided that,
immediately after each Letter of Credit is issued (i) the Total Outstanding
Amount shall not exceed the aggregate amount of the Commitments, (ii) the
aggregate Dollar Amount of Letter of Credit Liabilities shall not exceed the
Letters of Credit Sublimit and (iii) the sum of the aggregate Dollar Amount of
the aggregate principal amount of all outstanding Committed Alternative Currency
Loans plus the aggregate Dollar Amount of the aggregate Letter of Credit
Liabilities for Letters of Credit in an Alternative Currency shall not exceed
the Alternative Currency Sublimit. Upon the date of issuance by the Issuing
Lender of a Letter of Credit, the Issuing Lender shall be deemed, without
further action by any party hereto, to have sold to each Lender, and each Lender
shall be deemed, without further action by any party hereto, to have purchased
from the Issuing Lender, a participation in such Letter of Credit and the
related Letter of Credit Liabilities in the proportion their respective
Commitments bear to the aggregate Commitments.
(b) The Company shall give the Issuing Lender notice at least (i)
five Euro-Currency Business Days prior to the requested issuance of an
Alternative Currency Letter of Credit and (ii) three Domestic Business Days
prior to the requested issuance of a Dollar Letter of Credit specifying the date
such Letter of Credit is to be issued, and describing the terms of such Letter
of Credit, the nature of the transactions to be supported thereby and the
proposed Alternative Currency of such Letter of Credit (such notice, including
37
any such notice given in connection with the extension of a Letter of Credit, a
"NOTICE OF ISSUANCE"). Upon receipt of a Notice of Issuance, the Issuing Lender
shall promptly notify the Administrative Agent, and the Administrative Agent
shall promptly notify each Lender of the contents thereof and of the amount of
such Lender's participation in such Letter of Credit. The issuance by the
Issuing Lender of each Letter of Credit shall, in addition to the conditions
precedent set forth in Article 3, be subject to the conditions precedent that
such Letter of Credit shall be in such form and contain such terms as shall be
satisfactory to the Issuing Lender and that the Company shall have executed and
delivered such other instruments and agreements relating to such Letter of
Credit as the Issuing Lender shall have reasonably requested. The extension or
renewal of any Letter of Credit shall be deemed to be an issuance of such Letter
of Credit, and if any Letter of Credit contains a provision pursuant to which it
is deemed to be extended unless notice of termination is given by the Issuing
Lender, the Issuing Lender shall timely give such notice of termination unless
it has theretofore timely received a Notice of Issuance and the other conditions
to issuance of a Letter of Credit have also theretofore been met with respect to
such extension.
(c) Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance
of such Letter of Credit (or, in the case of any renewal or extension thereof,
one year after such renewal or extension) and (ii) the date that is five
Business Days prior to the Termination Date.
(d) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the Issuing Lender shall notify
the Administrative Agent and the Administrative Agent shall promptly notify the
Company and each other Lender as to the amount to be paid as a result of such
demand or drawing and the payment date. The Company shall be irrevocably and
unconditionally obligated forthwith to reimburse the Issuing Lender for any
amounts paid by the Issuing Lender upon any drawing under any Letter of Credit,
in the currency of such payment (a "REIMBURSEMENT OBLIGATION") without
presentment, demand, protest or other formalities of any kind. All such amounts
paid by the Issuing Lender and remaining unpaid by the Company shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus (i) if such amount is denominated in Dollars, the Base
Rate for such day and (ii) if such amount is denominated in an Alternative
Currency, the sum of the Euro-Currency Margin plus the rate per annum at which
one-day deposits in the relevant currency are offered by the principal London
office of the Administrative Agent in the London interbank market for such day.
In addition, each Lender will pay to the Administrative Agent, for the account
of the Issuing Lender, immediately upon the Issuing Lender's demand at any time
during the period commencing after such drawing until reimbursement therefor in
38
full by the Company, an amount equal to such Lender's ratable share of such
drawing (in proportion to its participation therein), together with interest on
such amount for each day from the date of the Issuing Lender's demand for such
payment (or, if such demand is made after 12:00 Noon (New York City time) on
such date, from the next succeeding Domestic Business Day) to the date of
payment by such Lender of such amount at a rate of interest per annum equal to
(i) if such amount is denominated in Dollars, the Federal Funds Rate and (ii) if
such amount is denominated in an Alternative Currency, the rate per annum at
which one-day deposits in the relevant currency are offered by the principal
London office of the Administrative Agent in the London interbank market for
such day. The Issuing Lender will pay to each Lender ratably all amounts
received from the Company for application in payment of its reimbursement
obligations in respect of any Letter of Credit, but only to the extent such
Lender has made payment to the Issuing Lender in respect of such Letter of
Credit pursuant hereto.
(e) The obligations of the Company and each Lender under subsection
2.19(d) above shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including without limitation the following
circumstances:
(i) the use which may be made of any Letter of Credit by,
or any acts or omission of, a beneficiary of any Letter of Credit (or
any Person for whom the beneficiary may be acting);
(ii) the existence of any claim, set-off, defense or other
rights that the Company may have at any time against a beneficiary of
a Letter of Credit (or any Person for whom the beneficiary may be
acting), the Lenders (including the Issuing Lender) or any other
Person, whether in connection with this Agreement or the Letter of
Credit or any document related hereto or thereto or any unrelated
transaction;
(iii) any statement or any other document presented under
a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect whatsoever;
(iv) payment under a Letter of Credit to the beneficiary
of such Letter of Credit against presentation to the Issuing Lender
of a draft or certificate that does not comply with the terms of the
Letter of Credit; or
(v) any other act or omission to act or delay of any kind
by any Lender (including the Issuing Lender), the Administrative
Agent or any other Person or any other event or circumstance
whatsoever that might, but for the provisions of this subsection (v),
39
constitute a legal or equitable discharge of the Company's or the
Lender's obligations hereunder.
(f) The Company hereby indemnifies and holds harmless each Lender
(including the Issuing Lender) and the Administrative Agent from and against any
and all claims, damages, losses, liabilities, costs or expenses which such
Lender or the Administrative Agent may incur (including, without limitation, any
claims, damages, losses, liabilities, costs or expenses which the Issuing Lender
may incur by reason of or in connection with the failure of any other Lender to
fulfill or comply with its obligations to the Issuing Lender hereunder (but
nothing herein contained shall affect any rights the Company may have against
such defaulting Lender)), and none of the Lenders (including the Issuing Lender)
nor the Administrative Agent nor any of their officers or directors or employees
or agents shall be liable or responsible, by reason of or in connection with the
execution and delivery or transfer of or payment or failure to pay under any
Letter of Credit, including without limitation any of the circumstances
enumerated in subsection 2.19(e) above, as well as (i) any error, omission,
interruption or delay in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, (ii) any loss or delay in the transmission
of any document required in order to make a drawing under a Letter of Credit,
and (iii) any consequences arising from causes beyond the control of the Issuing
Lender, including without limitation any government acts, or any other
circumstances whatsoever in making or failing to make payment under such Letter
of Credit; provided that the Company shall not be required to indemnify the
Issuing Lender for any claims, damages, losses, liabilities, costs or expenses,
and the Company shall have a claim for direct (but not consequential) damage
suffered by it, to the extent found by a court of competent jurisdiction to have
been caused by (x) the willful misconduct or gross negligence of the Issuing
Lender in determining whether a request presented under any Letter of Credit
complied with the terms of such Letter of Credit or (y) the Issuing Lender's
failure to pay under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of the Letter of
Credit. Nothing in this Section 2.19(f) is intended to limit the obligations of
the Company under any other provision of this Agreement. To the extent the
Company does not indemnify the Issuing Lender as required by this subsection,
the Lenders agree to do so ratably in accordance with their Commitments.
(g) If any Event of Default shall occur and be continuing, on the day
that the Company receives notice from the Administrative Agent or the Required
Lenders demanding the deposit of cash collateral pursuant to this paragraph, the
Company shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Lenders, an amount in
cash in the relevant currency equal to the Letter of Credit Liabilities as of
such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
40
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Company described in clause (g) or (clause (h) of Section 6.01 .
Such deposit shall be held by the Administrative Agent as collateral for the
payment and performance of the obligations of the Company under this Agreement.
The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits, which investments shall be made at
the option and sole discretion of the Administrative Agent and at the Company's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Lender for Letter of Credit Disbursements for which it has not been reimbursed
and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Company for the Letter of Credit Liabilities at
such time or, if the maturity of the Loans has been accelerated, be applied to
satisfy other obligations of the Company under this Agreement. If the Company is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Company within three Euro-Dollar Business
Days after all Events of Default have been cured or waived.
Section 2.20. Incremental Increase in Commitments. (a) At any time,
if no Event of Default shall have occurred and be continuing, the Company may,
if it so elects but subject to due authorization by all necessary corporate
action, increase the aggregate amount of the Commitments (the "INCREMENTAL
COMMITMENTS"), either by designating one or more financial institutions not
theretofore Lenders to become a Lender (such designation to be effective only
with the prior written consent of the Administrative Agent, which consent will
not be unreasonably withheld or delayed), or by agreeing with one or more
existing Lenders that such Lender's Commitment shall be increased. The
Incremental Commitments shall be treated as Commitments for all purposes under
this Agreement, except as specifically addressed herein. No Lender shall be
obligated to make any Incremental Commitment unless it shall elect to do so in
its sole and absolute discretion in response to the Company's request.
(b) Upon execution and delivery by the Company and such Lender or
other financial institution of an instrument (the "INCREMENTAL COMMITMENT
NOTICE") in form reasonably satisfactory to the Administrative Agent (which
instrument shall specify the amount of each Commitment), such existing Lender
shall have a Commitment as therein set forth or such other financial institution
shall become a Lender with a Commitment as therein set forth and all the rights
and obligations of a Lender with such a Commitment hereunder; provided that:
41
(i) the Company shall provide prompt notice of such
increase to the Administrative Agent, who shall promptly notify the
Lenders;
(ii) the amount of such Incremental Commitment, together
with all other increases in the aggregate amount of the Commitments
pursuant to this Section 2.20 since the date of this Agreement, shall
not exceed $150,000,000;
(iii) the Letter of Credit Sublimit and Alternative
Currency Sublimit shall each be increased by an amount which bears
the same ratio to the Increased Commitments as the Letter of Credit
Sublimit and Alternative Currency Sublimit, respectively, bears to
the aggregate Commitments then existing; and
(iv) after giving effect to such increase or new
Commitment, the amount of the Commitment of any Lender shall not
exceed 20% of the aggregate amount of the Commitments (excluding, for
purposes of this clause (iv), any increase resulting solely from the
merger or the acquisition of one Lender into or by another Lender).
ARTICLE 3
CONDITIONS
Section 3.01. Closing. The closing hereunder shall occur upon receipt
by the Administrative Agent of the following documents, each dated the Closing
Date unless otherwise indicated:
(a) an opinion of Weil, Gotshal & ▇▇▇▇▇▇, LLP, counsel for the
Obligors, substantially in the form of Exhibit E hereto and covering such
additional matters relating to the transactions contemplated hereby as the
Required Lenders may reasonably request;
(b) an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the
Administrative Agent, substantially in the form of Exhibit F hereto and covering
such additional matters relating to the transactions contemplated hereby as the
Required Lenders may reasonably request;
(c) an advice from the Administrative Agent that it has received all
fees and other amounts due and payable on or prior to the Closing Date,
including reimbursement or payment of all reasonable out-of-pocket expenses to
be reimbursed or paid by the Company;
(d) all documents the Administrative Agent may reasonably request
relating to the existence of each of the Company and the Company Guarantor, the
corporate authority for and the validity of this Agreement and the Notes, and
42
any other matters relevant hereto, all in form and substance satisfactory to the
Administrative Agent; and
(e) the Administrative Agent shall have received evidence reasonably
satisfactory to it that all principal of any loans outstanding under, and all
accrued interest and fees under, the Existing Credit Agreement shall have been
paid in full and that the commitments under the Existing Credit Agreement have
been terminated.
The Administrative Agent shall promptly notify the Company and the Lenders of
the Closing Date, and such notice shall be conclusive and binding on all parties
hereto.
Section 3.02. Borrowings and Issuances of Letters of Credit. The
obligation of any Lender to make a Loan on the occasion of any Borrowing and the
obligation of the Issuing Lender to issue (or renew or extend the term of ) any
Letter of Credit is subject to the satisfaction of the following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.02 or Section 2.03, or receipt by the Issuing Lender of a
Notice of Issuance as required by Section 2.19, as the case may be;
(b) the fact that, immediately after such Borrowing or issuance of
such Letter of Credit (i) the Total Outstanding Amount will not exceed the
aggregate amount of the Commitments, (ii) the aggregate amount of Letter of
Credit Liabilities will not exceed the Letter of Credit Sublimit, and (iii) the
sum of the aggregate Dollar Amount of the aggregate principal amount of all
outstanding Committed Alternative Currency Loans plus the aggregate Dollar
Amount of the aggregate Letter of Credit Liabilities for Letters of Credit in an
Alternative Currency shall not exceed the Alternative Currency Sublimit;
(c) the fact that, immediately before and after such Borrowing or
issuance of such Letter of Credit, no Default shall have occurred and be
continuing;
(d) the fact that the representations and warranties of the Company
and the Company Guarantor (and, in the case of a Borrowing or an issuance of a
Letter of Credit by an Eligible Subsidiary, of such Eligible Subsidiary)
contained in this Agreement shall be true on and as of the date of such
Borrowing or issuance of such Letter of Credit; and
(e) the closing shall have occurred in accordance with Section 3.01.
Each Borrowing and issuance of a Letter of Credit hereunder shall be deemed to
be a representation and warranty by the Company and the Company Guarantor (and,
43
in the case of a Borrowing or an issuance of a Letter of Credit by an Eligible
Subsidiary, of such Eligible Subsidiary) on the date of such Borrowing as to the
facts specified in clauses (b), (c) and (d) of this Section.
Section 3.03. First Borrowing by Each Eligible Subsidiary. The
obligation of each Lender to make a Loan, and the obligation of the Issuing
Lender to issue a Letter of Credit, on the occasion of the first Borrowing by or
issuance of a Letter of Credit for the account of each Eligible Subsidiary is
subject to the satisfaction of the following further conditions:
(a) receipt by the Administrative Agent of an opinion of counsel for
such Eligible Subsidiary reasonably acceptable to the Administrative Agent
covering such matters relating to the transactions contemplated hereby as the
Required Lenders may reasonably request; and
(b) receipt by the Administrative Agent of all documents which it may
reasonably request relating to the existence of such Eligible Subsidiary, the
corporate authority of and the validity of the Election to Participate of such
Eligible Subsidiary, this Agreement and the Notes (if any) of such Eligible
Subsidiary, and any other matters relevant thereto, all in form and substance
reasonably satisfactory to the Administrative Agent.
Section 3.04. Prior Credit Agreement. (a) On the Closing Date, the
"Facility Commitments" and the "Alternative Currency Commitments", if any, each
as defined in the Credit Agreement dated as of June 28, 2001 among The ▇▇▇▇▇
▇▇▇▇▇▇ Companies Inc., as Borrower, ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as Guarantor, the Lenders
from time to time party thereto, JPMorgan Chase Bank, N.A. (as successor to The
Chase Manhattan Bank), as Administrative Agent, Citibank, N.A. and Bank of
America, N.A. (as successor to Fleet National Bank), as Syndication Agents, and
Bank of Tokyo-Mitsubishi Trust Company and BNP Paribas, as Documentation Agents
(the "PRIOR CREDIT Agreement") shall terminate.
(b) The Lenders that are parties to the Prior Credit Agreement,
comprising the "Required Lenders" as defined therein, hereby waive any
requirement of notice of termination of the "Facility Commitments" and the
"Alternative Currency Commitments" (each as defined in the Prior Credit
Agreement) pursuant to Section 2.09 thereof.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Each of the Company and the Company Guarantor jointly and severally
represents and warrants that:
44
Section 4.01. Corporate Existence and Power. Each Obligor is an
organization duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, and has all requisite powers and
all governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted, except to the extent that the failure to
have such licenses, authorizations, consents and approvals could not reasonably
be expected to have a Material Adverse Effect.
Section 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each of the Company
and the Company Guarantor (and, as applicable, each Eligible Subsidiary) of this
Agreement and by the Company (and, as applicable, each Eligible Subsidiary) of
the Notes (if any) are within the corporate powers of the Company and the
Company Guarantor, as applicable (and, as applicable, each Eligible Subsidiary),
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation,
organizational documents or by-laws of the Company or the Company Guarantor, as
applicable (and, as applicable, each Eligible Subsidiary), or of any agreement
evidencing or governing Debt or of any other material agreement, or of any
judgment, injunction, order, decree or other material instrument binding upon
the Company or any of its Subsidiaries or result in the creation or imposition
of any Lien on any asset of the Company or any of its Subsidiaries.
Section 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of each Obligor and each Note (if any), when executed and
delivered by the Company (and, as applicable, any Eligible Subsidiary) in
accordance with this Agreement, will constitute a valid and binding obligation
of the Company (and, as applicable, such Eligible Subsidiary), in each case
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
by general principles of equity.
Section 4.04. Financial Information. (a) The consolidated balance
sheet of the Company and its Consolidated Subsidiaries as of June 30, 2004 and
the related consolidated statements of earnings and cash flows for the fiscal
year then ended, reported on by KPMG LLP, a copy of which has been delivered to
each of the Lenders, fairly present, in conformity with generally accepted
accounting principles, the consolidated financial position of the Company and
its Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of March 31, 2005 and the related unaudited
consolidated statements of earnings and cash flows for the nine months then
45
ended, a copy of which has been delivered to each of the Lenders, fairly
present, in conformity with generally accepted accounting principles applied on
a basis consistent with the financial statements referred to in subsection (a)
of this Section, the consolidated financial position of the Company and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such nine-month period.
(c) On the Closing Date, there has been no material adverse change in
the business, financial position or results of operations of the Company and its
Consolidated Subsidiaries, considered as a whole, since March 31, 2005.
Section 4.05. Litigation. Except as described in Schedule 4.05, there
is no action, suit or proceeding pending against, or to the knowledge of any
Obligor, overtly threatened against or affecting, the Company or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision which
could have a Material Adverse Effect, or which in any manner draws into question
the validity or enforceability of this Agreement or the Notes (if any).
Section 4.06. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA. Section
4.07. Environmental Matters. In the ordinary course of its business,
the Company conducts an ongoing review of the effect of Environmental Laws on
the business, operations and properties of the Company and its Subsidiaries, in
the course of which it identifies and evaluates associated liabilities and costs
(including, without limitation, any capital or operating expenditures required
for clean-up or closure of properties presently or previously owned, any capital
or operating expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in the
level of or change in the nature of operations conducted thereat, any costs or
46
liabilities in connection with off-site disposal of wastes or Hazardous
Substances, and any actual or potential liabilities to third parties, including
employees, and any related costs and expenses). On the basis of this review, the
Company has reasonably concluded that such associated liabilities and costs,
including the costs of compliance with Environmental Laws, are unlikely to have
a Material Adverse Effect.
Section 4.08. Taxes. The Company and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Company or any
Subsidiary, other than taxes due pursuant to any such assessment which are being
contested in good faith by appropriate proceedings. The charges, accruals and
reserves on the books of the Company and its Subsidiaries in respect of taxes or
other governmental charges are, in the opinion of the Company, adequate.
Section 4.09. Subsidiaries. (a) Each of the Company's corporate
Significant Subsidiaries (other than the Company Guarantor or the Eligible
Subsidiaries, with respect to which representations and warranties comparable to
those set forth in this Section are being made in Section 4.01) is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except to the extent that the failure to be or have
any of the foregoing could not reasonably be expected to have a Material Adverse
Effect.
(b) The Company owns, directly or indirectly, 100% of the outstanding
capital stock of the Company Guarantor.
Section 4.10. Regulatory Restrictions on Borrowing. No Obligor is an
"INVESTMENT COMPANY" within the meaning of the Investment Company Act of 1940,
as amended, or otherwise subject to any regulatory scheme which restricts its
ability to incur debt.
Section 4.11. Full Disclosure. All information heretofore furnished
by each Obligor to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by each Obligor to the Administrative
Agent or any Lender will be, true and accurate in all material respects on the
date as of which such information is stated or certified.
47
ARTICLE 5
COVENANTS
The Company agrees that, so long as any Lender has any Commitment
hereunder or any amount payable in respect of any Loan remains unpaid or any
Letter of Credit Liability remains outstanding:
Section 5.01. Information. The Company will furnish to each of the
Lenders:
(a) as soon as available and in any event within 75 days after the
end of each fiscal year of the Company, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of the end of such fiscal year and
the related consolidated statements of earnings and cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by KPMG LLP or other independent public
accountants of nationally recognized standing without any qualification or
exception which (i) is of a "GOING CONCERN" or similar nature, (ii) relates to
the limited scope of examination of matters relevant to such financial
statements or (iii) relates to the treatment or classification of any item in
such financial statements and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause an
Event of Default under Sections 5.09(k), 5.10 or 5.11;
(b) as soon as available and in any event within 40 days after the
end of each of the first three quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
of the end of such quarter, the related consolidated statements of earnings for
such quarter and the related consolidated statements of earnings and cash flows
for the portion of the Company's fiscal year ended at the end of such quarter,
setting forth in the case of such statements of earnings and cash flows, in
comparative form the figures for the corresponding quarter (with respect to the
statement of earnings only) and the corresponding portion of the Company's
previous fiscal year, all certified (subject to normal year-end adjustments) as
to fairness of presentation, generally accepted accounting principles and
consistency by the chief financial officer or the chief accounting officer of
the Company;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer, the chief accounting officer or the treasurer of the Company
(i) setting forth in reasonable detail the calculations required to establish
whether the Company was in compliance with the requirements of Sections 5.09
through 5.11, inclusive, on the date of such financial statements and (ii)
stating whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action which the
Company is taking or proposes to take with respect thereto;
48
(d) within ten days after any Senior Officer of any Obligor obtains
knowledge of any Default, if such Default is then continuing, a certificate of
the chief financial officer, the chief accounting officer or the treasurer of
the Company setting forth the details thereof and the action which each Obligor
is taking or proposes to take with respect thereto;
(e) within ten days after the mailing thereof to the stockholders of
the Company generally, copies of all financial statements, reports and proxy
statements so mailed;
(f) within ten days after the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and
8-K (or their equivalents) which the Company shall have filed with the
Securities and Exchange Commission;
(g) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "REPORTABLE EVENT" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer, the chief accounting officer or the
treasurer of the Company setting forth details as to such occurrence and action,
if any, which the Company or applicable member of the ERISA Group is required or
proposes to take; and
(h) from time to time such additional information regarding the
financial position or business of the Company and its Subsidiaries as the
Administrative Agent, at the request of any Lender, may reasonably request.
49
For purposes of this Section, the Company's obligation to deliver the items
referred to in Sections 5.01(a), (b), (e) and (f) will be deemed satisfied by
the electronic delivery to the Administrative Agent of such items and posting of
such items on a website to which the Lenders have access, and which shall have
been designated in a notice delivered to the Lenders and the Administrative
Agent.
Section 5.02. Payment of Obligations. The Company will pay and
discharge, and will cause each Significant Subsidiary to pay and discharge, at
or before maturity, all their respective material obligations and liabilities
(including, without limitation, tax liabilities and claims of materialmen,
warehousemen and the like which if unpaid might by law give rise to a Lien),
except where the same may be contested in good faith by appropriate proceedings
or to the extent that failure to do so could not reasonably be expected to have
a Material Adverse Effect, and will maintain, and will cause each Significant
Subsidiary to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
Section 5.03. Insurance. The Company will, and will cause each of its
Significant Subsidiaries to, maintain (either in the name of the Company or in
such Significant Subsidiary's own name), with financially sound and responsible
insurance companies or pursuant to a self-insurance program, insurance on all
their respective properties in at least such amounts, against at least such
risks and with such risk retention as are usually maintained, insured against or
retained, as the case may be, in the same general area by companies of
established repute engaged in the same or a similar business; and will furnish
to the Lenders, upon request from the Administrative Agent, information
presented in reasonable detail as to the insurance so carried.
Section 5.04. Conduct of Business and Maintenance of Existence. The
Company will preserve, renew and keep in full force and effect, and will cause
each Guarantor and each other Significant Subsidiary to preserve, renew and keep
in full force and effect its corporate existence and rights, privileges and
franchises necessary or desirable in the normal conduct of business (except,
solely with respect to any Significant Subsidiary that is not an Obligor, to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect); provided that nothing in this Section 5.04 shall prohibit (i)
the merger of a Significant Subsidiary into the Company or the merger or
consolidation of a Significant Subsidiary with or into another Person if the
corporation surviving such consolidation or merger is a Subsidiary (provided
that in the case of any such merger or consolidation involving a Guarantor, it
or the Company must be the surviving corporation) and if, in each case, after
giving effect thereto, no Default shall have occurred and be continuing or (ii)
the termination of the corporate existence of any Significant Subsidiary (other
than any Guarantor) if the Company in good faith determines that such
termination is in the best interest of the Company and is not materially
disadvantageous to the Lenders.
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Section 5.05. Compliance with Laws. The Company will comply, and
cause the Company Guarantor and each other Significant Subsidiary to comply, in
all material respects with all applicable laws, ordinances, rules, regulations,
and requirements of governmental authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder) except
where the necessity of compliance therewith is contested in good faith by
appropriate proceedings or to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect.
Section 5.06. Inspection of Property, Books and Records. The Company
will keep, and will cause the Company Guarantor and each other Significant
Subsidiary to keep, proper books of record and account in which full, true and
correct entries shall be made in all material respects of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause the Company Guarantor and each other Subsidiary to permit,
representatives of any Lender at such Lender's expense to visit and inspect any
of its properties, to examine and make abstracts from any of its books and
records and to discuss its affairs, finances and accounts with its officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
Section 5.07. Mergers and Sales of Assets. The Company will not, and
will not permit any Guarantor to, (i) consolidate or merge with or into any
other Person or (ii) sell, lease or otherwise transfer, directly or indirectly,
all or substantially all of the assets of the Company and its Subsidiaries,
taken as a whole, to any other Person; provided that (a) the Company may merge
with another Person if (x) the Company is the corporation surviving such merger
and (y) after giving effect to such merger, no Default shall have occurred and
be continuing and (b) any Guarantor may be a party to any merger or
consolidation permitted by Section 5.04.
Section 5.08. Use of Proceeds. The proceeds of the Loans made under
this Agreement will be used by each Borrower to provide credit support for such
Borrower's commercial paper program and for such general corporate purposes in
the ordinary course of business of the Company and its Subsidiaries as shall be
determined by the Company from time to time. None of such proceeds will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any "margin stock" within the meaning of
Regulation U.
Section 5.09. Negative Pledge. The Company will not, and will not
permit any Subsidiary to, create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
51
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal or face
amount not exceeding $50,000,000;
(b) any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary and not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring or constructing
such asset, provided that such Lien attaches to such asset concurrently with or
within 90 days after the acquisition or substantial completion of construction
thereof, as the case may be;
(d) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Company or a Subsidiary and
not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof
by the Company or a Subsidiary and not created in contemplation of such
acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is not
secured by any additional assets;
(g) Liens imposed by any governmental authority for taxes,
assessments, governmental charges, duties or levies not yet due or which are
being contested in good faith and by appropriate proceedings; provided adequate
reserves with respect thereto are maintained on the books of the Company and its
Consolidated Subsidiaries in accordance with generally accepted accounting
principles;
(h) carriers', warehousemen's, mechanics', transporters,
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business; provided any such Lien is either (x) discharged within five days of
the date when payment of the obligation secured by such Lien is due or (y) is
being contested in good faith by appropriate proceedings diligently conducted;
(i) Liens (other than Liens described in clauses (g) or (h)) arising
in the ordinary course of its business which (i) do not secure Debt or
Derivatives Obligations, (ii) do not secure any obligation in an amount
exceeding $50,000,000 and (iii) do not in the aggregate materially detract from
the value of its assets or materially impair the use thereof in the operation of
its business;
52
(j) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash equivalents
subject to such Liens may at no time exceed $50,000,000; and
(k) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt in an aggregate principal or face amount at any date not
to exceed the greater of (i) $150,000,000 and (ii) 15% of Consolidated Tangible
Net Worth at the last day of the most recently ended fiscal quarter.
Section 5.10. Debt to Total Capital. The Debt to Capital Ratio at the
last day of each fiscal quarter shall be less than 0.65:1.
Section 5.11. Debt of Subsidiaries. The Company will not permit any
of its Subsidiaries (other than the Company Guarantor) to incur or at any time
be liable with respect to any Debt other than (i) Debt owing to the Company or a
wholly owned Subsidiary, (ii) Debt created under this Agreement, (iii) any
commercial paper issued by an Eligible Subsidiary the credit support for which
is provided by this Agreement, and (iv) other Debt in an aggregate principal
amount outstanding not exceeding $300,000,000. For purposes of this Section any
preferred stock of a Subsidiary held by a Person other than the Company or a
Wholly-Owned Subsidiary shall be included, at the higher of its voluntary or
involuntary liquidation value, in the "DEBT" of such Subsidiary.
Section 5.12. Transactions with Affiliates. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, pay any funds to or
for the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any Affiliate (any such payment, investment, lease, sale, transfer, other
disposition or transaction, an "AFFILIATE TRANSACTION") except on an arms-length
basis on terms at least as favorable to the Company or such Subsidiary as terms
that could have been obtained from a third party who was not an Affiliate;
provided that the foregoing provisions of this Section shall not prohibit (i)
any such Person from declaring or paying any lawful dividend or other payment
ratably in respect of all of its capital stock of the relevant class so long as,
after giving effect thereto, no Default shall have occurred and be continuing,
(ii) any Affiliate Transaction disclosed in the Proxy Statement under the
heading "Certain Relationships and Related Transactions" or (iii) any Affiliate
Transaction (other than any Affiliate Transaction described in clauses (i) or
(ii)) in which the amount involved does not exceed $500,000. The approval by the
independent directors (or any committee thereof) of the board of directors of
the Company or a Subsidiary of any Affiliate Transaction to which the Company or
such Subsidiary is a party shall create a rebuttable presumption that such
Affiliate Transaction is on an arms-length basis on terms at least as favorable
53
to the Borrower or such Subsidiary as terms that could have been obtained from a
third party who was not an Affiliate.
ARTICLE 6
DEFAULTS
Section 6.01. Events of Default. If one or more of the following
events ("EVENTS OF DEFAULT") shall have occurred and be continuing:
(a) any Borrower shall fail to pay when due any principal of any Loan
or any Reimbursement Obligation or shall fail to pay any interest or fees
payable hereunder within five Domestic Business Days of the due date thereof;
(b) the Company shall fail to observe or perform any covenant
contained in Article 5, other than those contained in Sections 5.01 through 5.06
and 5.12;
(c) any Obligor shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) for 30 days after notice thereof has been given to the Company by the
Administrative Agent at the request of any Lender;
(d) any representation, warranty, certification or statement made by
any Obligor in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(e) the Company or any Subsidiary shall fail to make any payment in
respect of any Material Financial Obligations when due or within any applicable
grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the holder of such
Debt or any Person acting on such holder's behalf to accelerate the maturity
thereof;
(g) the Company or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
54
(h) an involuntary case or other proceeding shall be commenced
against the Company or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 90 days; or an order for relief shall be entered against the Company
or any Significant Subsidiary under the federal bankruptcy laws as now or
hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $50,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to administer any Material Plan; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $50,000,000;
(j) judgments or orders for the payment of money in excess of
$50,000,000 (net of any insurance with respect to which the carrier has
acknowledged coverage) shall be rendered against the Company or any Subsidiary
and such judgments or orders shall continue unsatisfied and unstayed for a
period of 30 days;
(k) there occurs a Change of Control; or
(l) the Guaranty or any provision thereof shall be found or held
invalid or unenforceable by a court of competent jurisdiction or either
Guarantor shall have repudiated its obligations under the Guaranty;
then, following the occurrence and during the continuance of every such event,
the Administrative Agent shall (i) if requested by Required Lenders, by notice
to the Company terminate the Commitments and they shall thereupon terminate, and
(ii) if requested by Lenders holding more than 50% of the aggregate principal
Dollar Amount of the Loans, by notice to the Company declare the Loans (together
with accrued interest thereon) to be, and the Loans shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by each Obligor; provided that in
55
the case of any of the Events of Default specified in clause 6.01(g) or 6.01(h)
above with respect to the Company, without any notice to any Obligor or any
other act by the Administrative Agent or the Lenders, the Commitments shall
thereupon terminate and the Loans (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Obligor.
Section 6.02. Notice of Default. The Administrative Agent shall give
notice to the Company under Section 6.01(c) promptly upon being requested to do
so by any Lender and shall thereupon notify all the Lenders thereof.
ARTICLE 7
THE ADMINISTRATIVE AGENT
Section 7.01. Appointment and Authorizations. Each Lender irrevocably
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes (if
any) as are delegated to the Administrative Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
Section 7.02. Agents and Affiliates. JPMorgan Chase Bank, N.A. shall
have the same rights and powers under this Agreement as any other Lender and may
exercise or refrain from exercising the same as though it were not the
Administrative Agent, and JPMorgan Chase Bank, N.A. and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Company or any Subsidiary or affiliate of the Company as if it
were not the Administrative Agent.
Section 7.03. Action by Agents. The obligations of Administrative
Agent hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Administrative Agent shall not be required to
take any action with respect to any Default, except as expressly provided in
Article 6, and except as expressly set forth herein and in other Financing
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Company or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliate in any capacity.
Section 7.04. Consultation with Experts. The Administrative Agent may
consult with legal counsel (who may be counsel for any Obligor), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
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Section 7.05. Liability of Agents. Neither the Administrative Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required
Lenders or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Administrative Agent nor any of its affiliates nor any
of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any Obligor; (iii) the satisfaction of any condition
specified in Article 3, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in connection
herewith. The Administrative Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
Section 7.06. Indemnification. Each Lender shall, ratably in
accordance with its Commitment (or, if at any time the Commitments shall have
been terminated, ratably in accordance with the aggregate outstanding principal
Dollar Amount of Loans of such Lender), indemnify the Administrative Agent, its
affiliates and their respective directors, officers, agents and employees (to
the extent not reimbursed by any Obligor) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees' gross negligence or willful
misconduct) that such indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees hereunder.
Section 7.07. Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Arranger
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the Arranger or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under this Agreement.
Section 7.08. Successor Agents. The Administrative Agent may resign
at any time by giving notice thereof to the Lenders and each Obligor and shall
resign if requested by the Required Lenders. Upon any such resignation, the
Required Lenders shall have the right (after consulting with the Company) to
appoint a successor to the Administrative Agent. If no successor to the
Administrative Agent shall have been so appointed by the Required Lenders, and
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shall have accepted such appointment, within 30 days after the retiring
Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized or licensed
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of its appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After the retiring
Administrative Agent's resignation hereunder, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent.
Section 7.09. Administrative Agent's Fees. The Company shall pay to
the Administrative Agent for its own account fees in the amounts and at the
times previously agreed upon between the Company and the Administrative Agent.
Section 7.10. Other Agents Not Liable. Nothing in this Agreement
shall impose upon Citibank, N.A., or Bank of America, N.A., in their capacities
as Syndication Agents, or Bank of Tokyo Mitsubishi Trust Company or BNP Paribas,
in their capacities as Documentation Agents, any duties or responsibilities
whatsoever.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any
Euro-Currency Loan or Competitive Bid LIBOR Loan:
(a) the Administrative Agent is advised by the Reference Banks that
deposits in the relevant currency (in the applicable amounts) are not being
offered to the Reference Banks in the relevant market for such Interest Period,
or
(b) in the case of Euro-Currency Loans, Lenders having 50% or more of
the aggregate amount of the Commitments advise the Administrative Agent that the
London Interbank Offered Rate as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Lenders of funding their
Euro-Currency Loans in the relevant currency for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Lenders, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, (i) the
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obligations of the Lenders to make Euro-Currency Loans in the relevant currency
or to continue or convert outstanding Loans as or into Euro-Currency Loans in
the relevant currency, as the case may be, shall be suspended, (ii) each
outstanding Euro-Currency Loan shall be prepaid (or in the case of an affected
Loan denominated in dollars, converted into a Base Rate Loan) on the last day of
the then current Interest Period applicable thereto, (iii) unless the Borrower
notifies the Administrative Agent at least two Domestic Business Days before the
date of any Fixed Rate Borrowing denominated in dollars for which a Notice of
Borrowing has previously been given that it elects not to borrow on such date,
(x) if such Fixed Rate Borrowing is a Committed Dollar Borrowing, such Borrowing
shall instead be made as a Base Rate Borrowing and (y) if such Fixed Rate
Borrowing is a Competitive Bid LIBOR Borrowing, the Competitive Bid LIBOR Loans
comprising such Borrowing shall bear interest for each day from and including
the first day to but excluding the last day of the Interest Period applicable
thereto at the Base Rate for such day and (iv) any request for a Committed
Alternative Currency Loan shall be ineffective.
Section 8.02. Illegality. If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Euro-Currency Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Lender (or its Euro-Currency Lending Office) to make, maintain or fund any of
its Euro-Currency Loans in any currency and such Lender shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Lenders and the Company, whereupon until such Lender
notifies the Company and the Administrative Agent that the circumstances giving
rise to such suspension no longer exist, the obligation of such Lender to make
Euro-Currency Loans in such currency, or to convert or continue outstanding
Loans into Euro-Currency Loans in such currency, shall be suspended. Before
giving any notice to the Administrative Agent pursuant to this Section, such
Lender shall designate a different Euro-Currency Lending Office if such
designation will avoid the need for giving such notice and will not, in the sole
judgment of such Lender, be otherwise disadvantageous to such Lender. If such
notice is given, each Euro-Currency Loan of such Lender then outstanding in such
currency shall be converted at the Exchange Rate on the day of conversion to a
Base Rate Loan either (a) on the last day of the then current Interest Period
applicable to such Euro-Currency Loan if such Lender may lawfully continue to
maintain and fund such Loan to such day or (b) immediately if such Lender shall
determine that it may not lawfully continue to maintain and fund such Loan to
such day.
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Section 8.03. Increased Cost and Reduced Return. (a) If on or after
(x) the date hereof, in the case of any Committed Loan or Letter of Credit or
any obligation to make Committed Loans or issue or participate in any Letter of
Credit or (y) the date of any related Competitive Bid Quote, in the case of any
Competitive Bid Loan, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall impose, modify or deem
applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
with respect to any Euro-Currency Loan any such requirement with respect to
which such Lender is entitled to compensation during the relevant interest
period under Section 2.20), special deposit, insurance assessment or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (or its Applicable Lending Office) or shall impose on
any Lender (or its Applicable Lending Office) or on the London interbank market
any other condition affecting its Fixed Rate Loans, its Note (if any) or its
obligation to make Fixed Rate Loans or its obligations hereunder with respect of
Letters of Credit and the result of any of the foregoing is to increase the cost
to such Lender (or its Applicable Lending Office) of making or maintaining any
Fixed Rate Loan or issuing or participating in any Letter of Credit, or to
reduce the amount of any sum received or receivable by such Lender (or its
Applicable Lending Office) under this Agreement or under its Note (if any) with
respect thereto, by an amount deemed by such Lender to be material, then, within
15 days after demand by such Lender (with a copy to the Administrative Agent),
the Company shall pay, or shall cause another Borrower to pay, to such Lender
such additional amount or amounts as will compensate such Lender for such
increased cost or reduction.
(b) If any Lender shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Lender (or its Parent) as a consequence of such Lender's
obligations hereunder to a level below that which such Lender (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, within 15 days
after demand by such Lender (with a copy to the Administrative Agent), the
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Company shall pay to such Lender such additional amount or amounts as will
compensate such Lender (or its Parent) for such reduction.
(c) Each Lender will promptly notify the Company and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole judgment of such Lender, be otherwise disadvantageous
to such Lender. A certificate of any Lender claiming compensation under this
Section and setting forth the additional amount or amounts to be paid to it
hereunder and the calculation thereof in reasonable detail shall be conclusive
in the absence of manifest error. In determining such amount, such Lender may
use any reasonable averaging and attribution methods.
Section 8.04. Taxes. (a) For the purposes of this Section 8.04, the
following terms have the following meanings:
"TAXES" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by any
Obligor pursuant to this Agreement or under any Note, and all liabilities with
respect thereto, excluding (i) in the case of each Lender and the Administrative
Agent, taxes imposed on its income, and franchise or similar taxes imposed on
it, by a jurisdiction under the laws of which such Lender or the Administrative
Agent (as the case may be) is organized or in which its principal executive
office is located or, in the case of each Lender, in which its Applicable
Lending Office is located and (ii) in the case of each Lender, any United States
withholding tax imposed on such payments but only to the extent that such Lender
is subject to United States withholding tax that is not creditable against such
Lender's tax liability in the jurisdiction under the laws of which such Lender
is organized or in which its principal executive office is located or in which
its Applicable Lending Office is located at the time such Lender first becomes a
party to this Agreement.
"OTHER TAXES" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or from
the execution or delivery of, or otherwise with respect to, this Agreement or
any Note.
(b) Any and all payments by any Obligor to or for the account of any
Lender or the Administrative Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if an Obligor
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
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sums payable under this Section) such Lender or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Obligor shall make such deductions, (iii)
such Obligor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) such
Obligor shall furnish to the Administrative Agent, at its address referred to in
Section 10.01, the original or a certified copy of a receipt evidencing payment
thereof.
(c) Each Obligor agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be paid within 30 days after such Lender or the
Administrative Agent (as the case may be) makes demand therefor.
(d) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Company
(but only so long as such Lender remains lawfully able to do so), shall provide
the Company and the Administrative Agent with Internal Revenue Service form
W-8BEN or W-8ECI, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which exempts
the Lender from United States withholding tax or reduces the rate of withholding
tax on payments of interest for the account of such Lender or certifying that
the income receivable pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the United States.
(e) For any period with respect to which a Lender has failed to
provide the Company or the Administrative Agent with the appropriate form
pursuant to Section 8.04(d) (unless such failure is due to a change in treaty,
law or regulation occurring subsequent to the date on which such form originally
was required to be provided), such Lender shall not be entitled to
indemnification under Section 8.04(b) or (c) with respect to Taxes imposed by
the United States; provided that if a Lender, which is otherwise exempt from or
subject to a reduced rate of withholding tax, becomes subject to Taxes because
of its failure to deliver a form required hereunder, the Company shall take such
steps as such Lender shall reasonably request to assist such Lender to recover
such Taxes.
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(f) If any Obligor is required to pay additional amounts to or for
the account of any Lender pursuant to this Section, then such Lender will change
the jurisdiction of its Applicable Lending Office if, in the sole judgment of
such Lender, such change (i) will eliminate or reduce any such additional
payment which may thereafter accrue and (ii) is not otherwise disadvantageous to
such Lender.
Section 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Lender to make, or to convert or continue
outstanding Loans to, Euro-Currency Loans in any currency has been suspended
pursuant to Section 8.02 or (ii) any Lender has demanded compensation under
Section 8.03 or 8.04 with respect to its Euro-Currency Loans in any currency and
the Company shall, by at least five Euro-Dollar Business Days' prior notice to
such Lender through the Administrative Agent, have elected that the provisions
of this Section shall apply to such Lender, then, unless and until such Lender
notifies the Company that the circumstances giving rise to such suspension or
demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Lender as (or
continued as or converted into) Euro-Currency Loans in such currency shall be
made instead as Base Rate Loans (in the case of Committed Alternative Currency
Loans, in the same Dollar Amount as the Euro-Currency Loan that such Lender
would otherwise have made in the Alternative Currency (on which interest and
principal shall be payable contemporaneously with the related Fixed Rate Loans
of the other Lenders); and
(b) after each of its Euro-Currency Loans in such currency has been
repaid (or converted to a Base Rate Loan), all payments of principal which would
otherwise be applied to repay such Fixed Rate Loans shall be applied to repay
its Base Rate Loans instead.
If such Lender notifies the Company that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a Euro-Currency Loan denominated in the relevant currency, as
the case may be, on the first day of the next succeeding Interest Period
applicable to the related Euro-Currency Loans of the other Lenders. If such Loan
is converted into an Committed Alternative Currency Loan, such Lender, the
Administrative Agent and the relevant Borrower shall make such arrangements as
shall be required (including increasing or decreasing the amount of such
Committed Alternative Currency Loan) so that such Committed Alternative Currency
Loan shall be in the same amount as it would have been if the provisions of this
Section had never applied thereto.
Section 8.06. Substitution of Lenders. If (i) the obligation of any
Lender to make Euro-Currency Loans has been suspended pursuant to Section 8.02
or (ii) any Lender has demanded compensation under Section 8.03 or 8.04, the
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Company shall have the right, with the assistance of the Administrative Agent
and the Issuing Lender, to seek a substitute lender or lenders (which may be one
or more of the Lenders), satisfactory to the Company, the Administrative Agent
and the Issuing Lender, to purchase the Loans and assume the Commitments and
Letter of Credit Liabilities of such Lender, for a purchase price equal to the
aggregate outstanding principal of such Loans (together with any accrued and
unpaid interest thereon and breakage costs, if any) or such other purchase price
as such Lender and substitute lender or lenders shall agree upon.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF ELIGIBLE SUBSIDIARIES
Each Eligible Subsidiary shall be deemed by the execution and
delivery of its Election to Participate to have represented and warranted as of
the date thereof that:
Section 9.01. Corporate Existence and Power. It is a company duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is a Wholly-Owned Consolidated Subsidiary.
Section 9.02. Corporate Governmental Authorization; No Contravention.
The execution and delivery by it of its Election to Participate and its Notes
(if any), and the performance by it of this Agreement and its Notes (if any),
are within its corporate powers, have been duly authorized by all necessary
company action, require no action by or in respect of, or filing with, any
governmental body, agency or official (other than those already obtained or made
and in full force and effect) and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of its certificate or
incorporation, articles of incorporation (or the equivalent organizational
documents) or by-laws (or the equivalent governing documents) or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Company or such Eligible Subsidiary or result in the creation or imposition
of any Lien on any asset of the Company or any of its Subsidiaries.
Section 9.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of such Eligible Subsidiary and its Notes, when and if
executed and delivered in accordance with this Agreement, will constitute valid
and binding obligations of such Eligible Subsidiary, in each case enforceable in
accordance with its terms except as the same may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and by general
principles of equity.
Section 9.04. Taxes. Except as disclosed in such Election to
Participate, there is no income, stamp or other tax of any country, or any
taxing authority thereof or therein, imposed by or in the nature of withholding
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or otherwise, which is imposed on any payment to be made by such Eligible
Subsidiary pursuant hereto or on its Notes (if any), or is imposed on or by
virtue of the execution, delivery or enforcement of its Election to Participate
or of its Notes (if any).
ARTICLE 10
MISCELLANEOUS
Section 10.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
facsimile transmission or similar writing) and shall be given to such party: (a)
in the case of the Company, the Company Guarantor or the Administrative Agent,
at its address or facsimile number set forth on the signature pages hereof, (b)
in the case of any Lender, at its address or facsimile number set forth in its
Administrative Questionnaire, (c) in the case of any Eligible Subsidiary, to it
in care of the Company or (d) in the case of any party, such other address or
facsimile number as such party may hereafter specify for the purpose by notice
to the Administrative Agent and the Company. Each such notice, request or other
communication shall be effective (i) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and confirmation
of receipt is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid or (iii) if given by any other means, when delivered at the address
specified in this Section; provided that notices to the Administrative Agent or
the Issuing Lender under Article 2 or Article 8 shall not be effective until
received.
Section 10.02. No Waivers. No failure or delay by the Administrative
Agent or any Lender in exercising any right, power or privilege hereunder or
under any Note shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 10.03. Expenses; Indemnification. (a) The Company shall pay
(i) all reasonable out-of-pocket expenses of the Administrative Agent and the
Arranger, including reasonable fees and disbursements of special counsel for the
Administrative Agent, in connection with the preparation and administration of
this Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (ii) if an Event of Default occurs, all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Lender
and each Lender, including (without duplication) the fees and disbursements of
outside counsel and the allocated cost of inside counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
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(b) The Company agrees to indemnify the Administrative Agent, the
Issuing Lender, the Arranger and each Lender, their respective affiliates and
the respective directors, officers, agents and employees of the foregoing (each
an "INDEMNITEE") and hold each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel, which may be
incurred by such Indemnitee in connection with any investigative, administrative
or judicial proceeding (whether or not such Indemnitee shall be designated a
party thereto) brought or overtly threatened relating to or arising out of this
Agreement or any actual or proposed use of proceeds of Loans hereunder; provided
that no Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee's own gross negligence or willful misconduct as determined by a court
of competent jurisdiction. Each Indemnitee agrees to notify the Company promptly
of any proceeding in respect of which it will seek indemnification hereunder;
provided, however, that the failure of any Indemnitee so to notify the Company
shall not affect the rights of such Indemnitee hereunder; but provided, further,
that the Company shall be entitled to assert by separate action against such
Indemnitee any claim for actual damages incurred by the Company as a consequence
of such failure by such Indemnitee to give such notice. In the event any action,
suit or proceeding is brought against any Indemnitee by any Person other than a
Lender, the Administrative Agent, the Issuing Lender or any of their respective
affiliates (a "THIRD PARTY ACTION"), (i) the Company shall be entitled, upon
written notice to such Indemnitee, to assume the investigation and defense
thereof with counsel reasonably satisfactory to such Indemnitee unless (x) the
employment by such Indemnitee of separate counsel has been specifically approved
by the Company in writing or (y) the designated parties to the proceeding in
which such claim, demand, action or cause of action has been asserted include
(or are reasonably likely to include) both such Indemnitee and any of the
Obligor, or any Affiliate (each, a "DESIGNATED RELATED PARTY") and in the
opinion of counsel for such Indemnitee there exist one or more defenses that may
be available to such Indemnitee which are in conflict with those available to
any designated related party, (ii) such Indemnitee shall be entitled to employ
separate counsel and to participate in the investigation and defense of any such
third party action (whether or not the Company has elected to assume such
investigation and defense as contemplated by clause (i) above) and (iii) the
fees and expenses of any separate counsel employed by any Indemnitee in
connection with any such third party action shall be borne by such Indemnitee
except (x) under the circumstances contemplated by subclauses (x) and (y) of
clause (i) above or (y) if such Indemnitee has reasonably concluded that the
Company is failing actively and diligently to defend such third party action
(whether or not the Company has elected to assume such investigation and defense
as contemplated by clause (i) above). The Company shall not settle or compromise
any action or claim without the relevant Indemnitee's consent if the settlement
or compromise involves any performance by, or adverse admission of, such
Indemnitee.
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Section 10.04. Sharing of Set-Offs. Each Lender agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Loan and Letter of Credit Liabilities held by it which is
greater than the proportion received by any other Lender in respect of the
aggregate amount of principal and interest due with respect to any Loan and
Letter of Credit Liability held by such other Lender, the Lender receiving such
proportionately greater payment shall purchase such participations in the Loans
and Letter of Credit Liabilities held by the other Lenders, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Loans and Letter of Credit
Liabilities held by the Lenders shall be shared by the Lenders pro rata;
provided that nothing in this Section shall impair the right of any Lender to
exercise any right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebtedness of the Obligors
other than its indebtedness hereunder. Each Obligor agrees, to the fullest
extent it may effectively do so under applicable law, that any holder of a
participation in a Loan and Letter of Credit Liability, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of such Obligor in the
amount of such participation.
Section 10.05. Amendments and Waivers. Except as explicitly set forth
in Section 2.12(b), any provision of this Agreement or the Notes (if any) may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by each Obligor and the Required Lenders (and, if the rights or duties of
the Administrative Agent or the Issuing Lender are affected thereby, by the
Administrative Agent and the Issuing Lender, respectively); provided that,
except as explicitly set forth in Section 2.12(b), no such amendment or waiver
shall, (x) (i) increase or decrease the Commitment of any Lender (except for a
ratable decrease in the Commitments of all Lenders) or subject any Lender to any
additional obligation unless signed by such Lender, (ii) reduce the principal of
or rate of interest on any Loan or the amount to be reimbursed in respect of any
Letter of Credit or any interest thereon or any fees hereunder unless signed by
each Lender directly affected thereby or (iii) postpone the date fixed for any
payment of principal of or interest on any Loan or for reimbursement in respect
of any Letter of Credit or any fees hereunder or for any scheduled reduction or
termination of any Commitment unless signed by each Lender directly affected
thereby or (y) unless signed by all the Lenders (i) release any Guarantor from
any of its obligations under Article 11, (ii) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Loans or the
aggregate amount of the Letter of Credit Liabilities, or the number of Lenders,
which shall be required for the Lenders or any of them to take any action under
this Section or any other provision of this Agreement or (iii) amend or waive
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the provisions of Section 10.04, this Section 10.05, Section 10.06(a) or the
definition of Required Lenders.
Increases in Commitments and related modifications pursuant to Section 2.20 are
not amendments subject to the provisions of this Section.
Section 10.06. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, except that none of the
Obligors may assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Lenders.
(b) Any Lender may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in its Commitments
or any or all of its Loans and Letter of Credit Liabilities. In the event of any
such grant by a Lender of a participating interest to a Participant, whether or
not upon notice to each Obligor and the Administrative Agent, such Lender shall
remain responsible for the performance of its obligations hereunder, and each
Obligor and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrowers hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Lender will not agree to any modification,
amendment or waiver of this Agreement described in Section 10.05 without the
consent of the Participant. Each Obligor agrees that each Participant shall, to
the extent provided in its participation agreement, be entitled to the benefits
of Section 2.18 and Article 8 with respect to its participating interest. An
assignment or other transfer which is not permitted by subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent of
and as a participating interest granted in accordance with this subsection (b).
(c) With the prior written consent of the Administrative Agent, the
Issuing Lender and, so long as no Event of Default has occurred and is
continuing, the Company, which consent shall not be unreasonably withheld
(provided that if an Assignee is an affiliate of such transferor Lender or was a
Lender immediately prior to such assignment or an Approved Fund, no such consent
from the Company shall be required), any Lender may at any time assign to one or
more banks or other institutions (each an "ASSIGNEE") all, or a proportionate
part (equivalent to an initial Commitment in an amount of not less than
$10,000,000) of all, of its rights and obligations under this Agreement and the
Notes (if any), and such Assignee shall assume such rights and obligations,
pursuant to an Assignment and Assumption Agreement in substantially the form of
68
Exhibit G hereto; provided that such assignment may, but need not, include
rights of the transferor Lender in respect of outstanding Competitive Bid Loans.
Upon execution and delivery of such instrument and payment by such Assignee to
such transferor Lender of an amount equal to the purchase price agreed between
such transferor Lender and such Assignee, such Assignee shall be a Lender party
to this Agreement and shall have all the rights and obligations of a Lender with
Commitments as set forth in such instrument of assumption, and the transferor
Lender shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required. Upon
the consummation of any assignment pursuant to this subsection (c), the
transferor Lender, the Administrative Agent and the Borrowers shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Lender shall
pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $3,500. If the Assignee is not incorporated under
the laws of the United States of America or a state thereof, it shall deliver to
the Company and the Administrative Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in accordance
with Section 8.04.
(d) Any Lender may at any time assign all or any portion of its
rights under this Agreement and its Note (if any) to a Federal Reserve Bank. No
such assignment shall release the transferor Lender from its obligations
hereunder.
(e) No Assignee, Participant or other transferee of any Lender's
rights shall be entitled to receive any greater payment under Section 8.03 or
8.04 than such Lender would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Company's prior
written consent or by reason of the provisions of Section 8.02, 8.03 or 8.04
requiring such Lender to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Notwithstanding anything to the contrary contained herein, any
Lender (a "GRANTING LENDER") may grant to a special purpose funding vehicle (an
"SPC") sponsored by a Granting Lender and identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and the Company,
the option to provide to the Company all or any part of any Loan that such
Granting Lender would otherwise be obligated to make to the Borrower pursuant to
this Agreement; provided that (i) nothing herein shall constitute a commitment
by any SPC to make any Loan and (ii) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Loan, the Granting
Lender shall be obligated to make such Loan pursuant to the terms hereof. The
making of a Loan by an SPC hereunder shall utilize the Commitments of the
Granting Lender to the same extent, and as if, such Loan were made by such
69
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any other
Person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding anything to the
contrary in this Section 10.06, any SPC may (i) with notice to, but without the
prior written consent of, the Company and the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in
any Loans to the Granting Lender or to any financial institution providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or maintenance of Loans; provided that any such assignment to a
financial institution other than to the Granting Lender shall require the
consent of the Company and the Administrative Agent, which consent shall be
provided in the sole and absolute discretion of the Company or the
Administrative Agent, as the case may be, and (ii) disclose any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC; provided that any such Person (other than a rating agency) signs a
confidentiality agreement which contains substantially the same provisions as
set forth in Section 10.11. As this Section 10.06(f) applies to any particular
SPC, this Section 10.06(f) may not be amended without the written consent of
such SPC. Additionally, the Company shall not be subject to any increased costs
pursuant to Section 8.03, indemnity claims pursuant to Section 10.03(b) or
increased taxes pursuant to Section 8.04 (collectively, "INCREASED COSTS") with
respect to an SPC if the Company would not have been subjected to such Increased
Costs had the Loan not been funded (directly or indirectly) by the SPC and any
payment for any such Increased Costs shall be limited to the amounts that the
Company would have been required to pay to the Granting Lender if such Loan had
not been so funded by the SPC.
Section 10.07. Collateral. Each of the Lenders represents to the
Administrative Agent and each of the other Lenders that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
Section 10.08. Governing Law, Submission to Jurisdiction . This
Agreement and each Note (if any) shall be governed by and construed in
accordance with the laws of the State of New York. Each Obligor hereby submits
to the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in New
70
York City for purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. Each Obligor irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
Section 10.09. Counterparts; Integration; Effectiveness. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective upon receipt by the Administrative
Agent of counterparts hereof signed by each of the parties hereto (or, in the
case of any party as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form satisfactory to it of
telegraphic, telex, facsimile or other written confirmation from such party of
execution of a counterpart hereof by such party).
Section 10.10. WAIVER OF JURY TRIAL. EACH OBLIGOR, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 10.11. Confidentiality. Each of the Administrative Agent and
each Lender agrees to keep any information delivered or made available by any
Obligor pursuant to this Agreement confidential from anyone other than persons
employed or retained by the Administrative Agent or such Lender who are engaged
in evaluating, approving, structuring or administering the credit facility
contemplated hereby; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing such information (a) to any
persons employed or retained by the Administrative Agent or any other Lender who
are engaged in evaluating, approving, structuring or administering the credit
facility contemplated hereby, (b) to any other Person if reasonably incidental
to the administration of the credit facility contemplated hereby so long as such
Person agrees to keep such information confidential in accordance with the
provisions of this Section 10.11, (c) upon the order of any court or
administrative agency, (d) upon the request or demand of any regulatory agency
or authority, (e) which had been publicly disclosed other than as a result of a
disclosure by the Administrative Agent or any Lender prohibited by this
Agreement or, to the knowledge of the Administrative Agent or such Lender, by
any other Person as a result of a disclosure by such Person in violation of an
obligation of confidentiality, (f) to the extent necessary, in connection with
any litigation to which the Administrative Agent, any Lender or its subsidiaries
71
or Parent may be a party, (g) to the extent necessary in connection with the
exercise of any remedy hereunder, (h) to such Lender's or the Administrative
Agent's legal counsel and independent auditors or (i) subject to an agreement
containing provisions substantially similar to those contained in this Section,
to (i) any actual or proposed Participant or Assignee or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to any Borrower and its obligations. Each Lender and the Administrative
Agent shall give the Company prompt notice of any disclosure made by such Lender
or the Administrative Agent, as the case may be, as permitted pursuant to
clauses (c), (d) (other than any such disclosure made by any Lender to bank
examiners during any examination of such Lender conducted in the ordinary course
by such examiners) or (f) of this Section, but solely to the extent permitted by
law and, in the case of any disclosure permitted pursuant to clause (f), solely
to the extent that the interests of such Lender or the Administrative Agent, as
the case may be, and the applicable Obligor in the relevant litigation are not
adverse in any material respect.
Section 10.12. Conversion of Currencies. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto (including
any Eligible Subsidiary) agrees, to the fullest extent that it may effectively
do so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures in the relevant jurisdiction the first currency could
be purchased with such other currency on the Euro-Currency Business Day
immediately preceding the day on which final judgment is given.
(b) The obligations of each Borrower in respect of any sum due to any
party hereto or any holder of the obligations owing hereunder (the "APPLICABLE
CREDITOR") shall, notwithstanding any judgment in a currency (the "JUDGMENT
CURRENCY") other than the currency in which such sum is stated to be due
hereunder (the "AGREEMENT CURRENCY"), be discharged only to the extent that, on
the Euro-Currency Business Day following receipt by the Applicable Creditor of
any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor
may in accordance with normal banking procedures in the relevant jurisdiction
purchase the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 10.12 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
Section 10.13. European Economic and Monetary Union. (a) Definitions.
In this Section 10.13 and in each other provision of this Agreement to which
72
reference is made in this Section 10.13 expressly or impliedly, the following
terms have the meanings given to them in this Section 10.13:
"EURO UNIT" means the currency unit of the Euro;
"NATIONAL CURRENCY UNIT" means the unit of currency (other than a
Euro Unit) of a Participating Member State;
(b) Redenomination and Eligible Currencies. On the date on which any
state that is not a Participating Member State on the date hereof becomes a
Participating Member State, each obligation under this Agreement of a party to
this Agreement which has been denominated in the National Currency Unit of such
Participating Member State shall be redenominated into the Euro Unit in
accordance with EMU Legislation.
(c) Loans. Any Loan in the currency of a state that becomes a
Participating Member State after the date hereof shall be made in the Euro Unit
after the date on which such state becomes a Participating Member State.
(d) Payments by the Administrative Agent to the Lenders. Any amount
payable by the Administrative Agent to the Lenders under this Agreement in the
currency of a state that becomes a Participating Member State after the date
hereof shall be paid in the Euro Unit after the date on which such state becomes
a Participating Member State.
Section 10.14. USA Patriot Act. Each Lender subject to the Act hereby
notifies the Borrowers that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "ACT"), it
is required to obtain, verify and record information that identifies each
Borrower, which information includes the names and addresses of each Borrower
and other information that will allow such Lender to identify each Borrower in
accordance with the Act.
ARTICLE 11
GUARANTY
Section 11.01. The Guaranty. Each Guarantor hereby unconditionally
guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest on each Loan made to
each Borrower pursuant to this Agreement, and the full and punctual payment of
all other amounts payable by each Borrower under this Agreement (including any
interest, fees, costs, expenses and other obligations that accrue after the
commencement of any bankruptcy, insolvency, reorganization or similar case or
proceeding, or which would have accrued but for such case, proceeding or other
action and whether or not such interest, fees, costs, expenses or other
73
obligations are allowed or allowable as a claim in such case, proceeding or
other action). Upon failure by any Borrower to pay punctually any such amount,
each Guarantor (in case of the obligations of the Company, only the Company
Guarantor) shall forthwith on demand pay the amount not so paid at the place and
in the manner and currency specified in this Agreement.
Section 11.02. Guaranty Unconditional. The obligations of each
Guarantor hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver
or release in respect of any obligation of any Borrower under this
Agreement or any Note, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to
this Agreement or any Note;
(iii) any release, impairment, non-perfection or
invalidity of any direct or indirect security for any obligation of
any Borrower under this Agreement or any Note;
(iv) any change in the corporate existence, structure or
ownership of any Borrower, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Borrower or
its assets or any resulting release or discharge of any obligation of
any Borrower contained in this Agreement or any Note;
(v) the existence of any claim, set-off or other rights
which either Guarantor may have at any time against any Borrower, the
Administrative Agent, the Issuing Lender, any Lender or any other
Person, whether in connection herewith or any unrelated transactions,
provided that nothing herein shall prevent the assertion of any such
claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or
against any Borrower for any reason of this Agreement or any Note, or
any provision of applicable law or regulation purporting to prohibit
the payment by any Borrower of the principal of or interest on any
Note or any other amount payable by any Borrower under this
Agreement; or
(vii) any other act or omission to act or delay of any
kind by any Borrower, the Administrative Agent, the Issuing Lender,
any Lender or any other Person or any other circumstance whatsoever
74
which might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of or defense to the Guarantor's
obligations hereunder.
Section 11.03. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. Each Guarantor's obligations hereunder shall remain in
full force and effect until the Commitments shall have terminated, the principal
of and interest on the Loans and all other amounts payable by the Borrowers
under this Agreement shall have been paid in full and no Letter of Credit
Liabilities remain outstanding. If at any time any payment of the principal of
or interest on any Loan, any reimbursement obligation or any other amount
payable by any Borrower under this Agreement is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of such
Borrower or otherwise, each Guarantor's obligations hereunder with respect to
such payment shall be reinstated as though such payment had been due but not
made at such time.
Section 11.04. Waiver by the Guarantor. Each Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any time any action be
taken by any Person against any Borrower or any other Person.
Section 11.05. Subrogation. Upon making any payment with respect to
any Borrower hereunder, each applicable Guarantor shall be subrogated to the
rights of the payee against such Borrower with respect to such payment; provided
that such Guarantor shall not enforce any payment by way of subrogation until
all amounts of principal of and interest on the Loans and all other amounts
payable by such Borrower under this Agreement have been paid in full and no
Letter of Credit Liabilities remain outstanding.
Section 11.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by any Borrower under this Agreement or the Notes
(if any) is stayed upon the insolvency, bankruptcy or reorganization of such
Borrower, all such amounts otherwise subject to acceleration under the terms of
this Agreement shall nonetheless be payable by each applicable Guarantor
hereunder forthwith on demand by the Agent made at the request of the requisite
proportion of the Lenders specified in Section 6.01 of this Agreement.
Section 11.07. Limitation of Liability. Notwithstanding the other
provisions of this Article 11, the obligations of each Guarantor hereunder shall
be limited to an aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under Section 548 of the
United States Bankruptcy Code or any comparable provisions of applicable law of
any State of the United States of America.
75
Section 11.08. Notice of Commitment Termination. The Company hereby
gives notice that the Company wishes to terminate the commitments under the
Existing Credit Agreement, effective as of the Effective Date. Each Lender that
is a party to the Existing Credit Agreement, by its execution hereof, waives any
requirement of prior notice set forth therein as a condition to the right of the
Company to terminate the commitments thereunder.
76
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
THE ▇▇▇▇▇ ▇▇▇▇▇▇ COMPANIES INC.,
as Borrower and Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Vice President and Treasurer
Address: ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ INC.,
as Company Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Vice President and Treasurer
Address: ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and Lender
By: /s/ [signature illegible]
----------------------------------------
Title: Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
Address: ▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
THE BANK OF TOKYO MITSUBISHI, LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
BNP PARIBAS
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Title: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Address:
Facsimile:
CITIBANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Managing Director/
Vice President
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇. ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
BANCO SANTANDER CENTRAL HISPANO, S.A.,
NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Managing Director
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Address: ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
HSBC BANK USA, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Senior Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
ROYAL BANK OF SCOTLAND
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Fuiks
----------------------------------------
Title: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Senior Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ STREET COMMITMENT CORPORATION
By: /s/ Manda D'Agata
----------------------------------------
Title: Assistant Vice President
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
Facsimile:
SANPAOLO IMI S.p.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Title: General Manager
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
MELLON BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Title: First Vice President
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
STATE STREET BANK AND TRUST COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Vice President
Address: ▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
BANCA NAZIONALE DEL LAVORO S.P.A.,
NEW YORK BRANCH
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Relationship Manager
By: /s/ [signature illegible]
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Title: Senior Relationship Manager
Address: ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title: Bank Officer
Address: ▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇-▇▇▇-▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
COMMITMENT SCHEDULE
LENDER COMMITMENT
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JPMORGAN CHASE BANK, N.A. $75,000,000
BANK OF AMERICA, N.A. $60,000,000
THE BANK OF TOKYO MITSUBISHI, LTD. $60,000,000
BNP PARIBAS $60,000,000
CITIBANK, N.A. $60,000,000
BANCO SANTANDER CENTRAL HISPANO, S.A., NEW YORK BRANCH $40,000,000
HSBC BANK USA, NATIONAL ASSOCIATION $40,000,000
ROYAL BANK OF SCOTLAND $40,000,000
▇▇▇▇▇▇▇ STREET COMMITMENT CORPORATION $40,000,000
SANPAOLO IMI S.P.A. $25,000,000
MELLON BANK, N.A. $25,000,000
STATE STREET BANK AND TRUST COMPANY $25,000,000
BANCA NAZIONALE DEL LAVORO S.P.A., NEW YORK BRANCH $25,000,000
U.S. BANK NATIONAL ASSOCIATION $25,000,000
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TOTAL $600,000,000
PRICING SCHEDULE
Each of "FACILITY FEE RATE" and "EURO-CURRENCY MARGIN" means, for any
day, the rate per annum set forth below in the row opposite such term and in the
column corresponding to the Pricing Level that applies on such day:
=================================== ================ =============== ================ ================ ================
PRICING LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
=================================== ================ =============== ================ ================ ================
Facility Fee Rate: 5 bps 6 bps 7 bps 8 bps 10 bps
Euro-Currency Margin:
Utilization
(less than or equal to) 50% 12.5 bps 14.0 bps 18.0 bps 24.5 bps 40.0 bps
Utilization
(greater than) 50% 17.5 19.0 bps 23.0 bps 29.5 bps 45.0 bps
=================================== ================ =============== ================ ================ ================
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Status" exists at any date if, at such date, the Company's
Unsecured Long-Term Debt is rated AA- or higher by S&P or Aa3 or higher by
Moody's.
"Level II Status" exists at any date if, at such date, (i) the
Company's Unsecured Long-Term Debt is rated A+ or higher by S&P or A1 or higher
by Moody's, and (ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (i) the
Company's Unsecured Long-Term Debt is rated A or higher by S&P or A2 or higher
by Moody's, and (ii) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (i) the
Company's Unsecured Long-Term Debt is rated A- or higher by S&P or A3 or higher
by Moody's, and (ii) neither Level I Status, Level II Status nor Level III
Status exists.
"Level V Status" exists at any date if, at such date, no other Status
applies.
"Moody's" means ▇▇▇▇▇'▇ Investors Services, Inc.
"S&P" means Standard & Poor's Rating Services.
"Status" refers to the determination of which of Level I Status,
Level II Status, Level III Status, Level IV Status or Level V Status exists at
any date.
"Utilization" means, at any date, the percentage equivalent of a
fraction (i) the numerator of which is the aggregate outstanding principal
amount of the loans at such date and the face amount of Letters of Credit
outstanding under the Revolving Credit Facility and (ii) the denominator of
which is the aggregate amount of the commitments at such date under the
Revolving Credit Facility, provided that if any loans remain outstanding
following the termination of the commitments under the Revolving Credit
Facility, Utilization will be deemed to be 100%.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of the Company
without third-party credit enhancement (the "Company's Unsecured Long-Term
Debt"), and any ratings assigned to any other debt security of the Company shall
be disregarded. The ratings in effect for any day are those in effect at the
close of business on such day. In the case of split ratings from S&P and
Moody's, the rating to be used to determine the applicable Status is the higher
of the two (e.g., AA-/A1 results in Level I Status); provided that if the split
is more than one full rating category, the rating one rating category below the
highest rating shall be used (e.g., A/Baa1 results in Level IV Status and
AA-/Baa1 results in Level II Status).
SCHEDULE 4.05
On March 30, 2005, the United States District Court for the Northern
District of California entered a Final Judgment approving the settlement
agreement we entered into in July 2003 with the plaintiffs, the other
Manufacturer Defendants (as defined below) and the Department Store Defendants
(as defined below) in a consolidated class action lawsuit that had been pending
in the Superior Court of the State of California in Marin County since 1998. On
April 29, 2005, a notice of appeal was filed. If the appeal is resolved
satisfactorily, the Final Judgment will result in the plaintiffs' claims being
dismissed, with prejudice, in their entirety in both the Federal and California
actions. There was no finding or admission of any wrongdoing by the Company or
any other defendant in this lawsuit. We entered into the settlement agreement
solely to avoid protracted and costly litigation. In connection with the
settlement agreement, the defendants, including the Company, will provide
consumers with certain free products and pay the plaintiffs' attorneys' fees. To
meet its obligations under the settlement, the Company took a special pre-tax
charge of $22.0 million, or $13.5 million after tax, equal to $.06 per diluted
common share in the fourth quarter of fiscal 2003. At April 30, 2005, the
remaining accrual balance was $17.2 million. The charge did not have a material
adverse effect on the Company's consolidated financial condition. In the Federal
action, the plaintiffs, purporting to represent a class of all U.S. residents
who purchased prestige cosmetics products at retail for personal use from eight
department stores groups that sold such products in the United States (the
"Department Store Defendants"), alleged that the Department Store Defendants,
the Company and eight other manufacturers of cosmetics (the "Manufacturer
Defendants") conspired to fix and maintain retail prices and to limit the supply
of prestige cosmetics products sold by the Department Store Defendants in
violation of state and Federal laws. The plaintiffs sought, among other things,
treble damages, equitable relief, attorneys' fees, interest and costs.
In 1998, the Office of the Attorney General of the State of New York
(the "State") notified the Company and ten other entities that they are
potentially responsible parties ("PRPs") with respect to the Blydenburgh
landfill in Islip, New York. Each PRP may be jointly and severally liable for
the costs of investigation and cleanup, which the State estimates to be $16
million for all the PRPs. In 2001, the State sued other PRPs (including ▇▇▇▇▇▇'▇
Carting, Inc., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, collectively the "▇▇▇▇▇▇
Parties"), in the U.S. District Court for the Eastern District of New York to
recover such costs in connection with the site, and in September 2002, the
▇▇▇▇▇▇ Parties brought contribution actions against the Company and other
Blydenburgh PRPs. These contribution actions seek to recover, among other
things, any damages for which the ▇▇▇▇▇▇ Parties are found liable in the State's
lawsuit against them, and related costs and expenses, including attorneys' fees.
In June 2004, the State added the Company and other PRPs as defendants in its
pending case against the ▇▇▇▇▇▇ Parties. The Company and certain other PRPs have
engaged in settlement discussions which to date have been unsuccessful. The
Company has accrued an amount which it believes would be necessary to resolve
its share of this matter. If settlement discussions are not successful, then the
Company intends to vigorously defend the pending claims. While no assurance can
be given as to the ultimate outcome, management believes that the resolution of
the Blydenburgh matters will not have a material adverse effect on the Company's
consolidated financial condition.
In January 2004, the Portuguese Tax Administration issued a report
alleging that our subsidiary had income subject to tax in Portugal for the three
calendar years ended December 31, 2002. Our subsidiary has been operating in the
Madeira Free Trade Zone since 1989 under license from the Madeira Development
Corporation and, in accordance with such license and the laws of Portugal, the
Company believes that its income is not subject to Portuguese income tax. In
February 2004, the subsidiary filed an appeal of the finding in the report to
the Portuguese Secretary of State for Fiscal Matters. The appeal is still
pending. On December 20, 2004, the subsidiary received a notice of assessment
from the Portuguese Tax Administration solely in respect of the calendar year
ended December 31, 2000. The assessment, which includes interest, amounted to
approximately 26 million Euros. At the end of March 2005, the subsidiary filed
an opposition to the assessment. Despite filing the opposition, the Portuguese
Tax Administration could seek to collect on the assessment, in which case it may
be necessary for us to provide a form of financial guarantee. On May 17 and 18,
2005, the subsidiary received notices of assessment from the Portuguese Tax
Administration in respect of the calendar years ended December 31, 2001 and
2002. The assessments are for Euro 21.6 million and Euro 22.4 million. The
Company intends to oppose these assessments. While no assurance can be given as
to the ultimate outcome in respect of the foregoing assessments or any
additional assessments that may be issued for subsequent periods, management
believes that the likelihood that the assessment or any future assessments
ultimately will be upheld is remote
In December 2004, a plaintiff purporting to represent a nationwide
class brought an action in the Superior Court of California for the County of
San Diego. The complaint, as amended, names two of our subsidiaries and
approximately 25 other defendants, including manufacturers and retailers. The
plaintiff is seeking injunctive relief, restitution, and general, special and
punitive damages for alleged violations of the California Unfair Competition
Law, the California False Advertising Law, and for negligent and intentional
misrepresentation. The purported class includes individuals "who have purchased
skin care products from defendants that have been falsely advertised to have an
`anti-aging or youth inducing benefit or effect." We intend to defend ourselves
vigorously. While no assurance can be given as to the ultimate outcome,
management believes that the resolution of this lawsuit will not have a material
adverse effect on the Company's consolidated financial condition.
EXHIBIT A
NOTE
New York, New York
___________ __ , 200_
For value received, ________________________, a ___________
corporation (the "BORROWER"), promises to pay to the order of
______________________ (the "LENDER"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Loan made by the Lender to the
Borrower pursuant to the Credit Agreement referred to below on the maturity date
provided for in the Credit Agreement. The Borrower promises to pay interest on
the unpaid principal amount of each such Loan on the dates and at the rate or
rates and in the currency provided for in the Credit Agreement. All such
payments of principal and interest shall be made (i) if in dollars, in lawful
money of the United States in Federal or other immediately available funds at
the office of JPMorgan Chase Bank, N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, or (ii) if in an Alternative Currency, in such funds as may then be
customary for the settlement of international transactions in such Alternative
Currency at the place specified for payment thereof pursuant to the Credit
Agreement.
All Loans made by the Lender, the respective types and maturities and
currencies thereof and all repayments of the principal thereof shall be recorded
by the Lender and, if the Lender so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Lender on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement
dated as of May __, 2005 among The ▇▇▇▇▇ ▇▇▇▇▇▇ Companies Inc., ▇▇▇▇▇ ▇▇▇▇▇▇
Inc., the Eligible Subsidiaries referred to therein, the lenders listed on the
signature pages thereof, Citibank, N.A. and Bank of America, N.A., as
Syndication Agents, Bank of Tokyo-Mitsubishi Trust Company and BNP Paribas, as
Documentation Agents and JPMorgan Chase Bank, N.A., as Administrative Agent (as
the same may be amended from time to time, the "CREDIT AGREEMENT"). Terms
defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
Pursuant to the terms of the Credit Agreement, [the Company
Guarantor][each Guarantor] has unconditionally guaranteed the full and punctual
payment of all amounts payable under this Note.
This note shall be governed by, and construed in accordance with, the
laws of the State of New York.
[THE BORROWER]
By:
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Name:
Title:
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LOANS AND PAYMENTS OF PRINCIPAL
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AMOUNT OF PRINCIPAL NOTATION
DATE AMOUNT OF LOAN TYPE OF LOAN REPAID MADE BY
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